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UKRAINIAN FUND INVESTS $30 MILLION IN TROUBLED ARMENIAN CARRIER
Eturbo News
December 20, 2014 Saturday
YEREVAN
YEREVAN, Dec. 20 -- A Ukrainian investment fund announced the purchase
of a 49 percent stake in Armenia's leading airline on Friday, pledging
to help restart soon its commercial flights that were suspended two
months ago.
Vladimir Bobylev, the chief executive of the East Prospect Fund,
pledged to invest at least $30 million in the troubled Air Armenia
carrier. Armenian news agencies quoted him as saying that it plans
to replace and expand the company's small fleet of aircraft in the
coming months.
It was not clear how much the fund, registered in the British Virgin
Islands but headquartered in Kiev, paid for the minority share. It
valued Air Armenia at $50 million on its website.
Air Armenia specialized in cargo shipments by air until Armenia's
flagship airline, Armavia, went bankrupt in April 2013, leading to
the full liberalization of the Armenian civil aviation sector. The
small carrier took over some of Armavia's flights later in 2013.
Air Armenia halted the flights to a dozen destinations in Russia and
Europe in late October as a result of a financial dispute with Russia's
national air navigation service. It accused the Rosaeronavigatsia
agency of scaring away its customers with false statements about its
outstanding debts. Aviation experts believe that the company also
struggled to compete with much larger Russian airlines.
According to Bobylev, Air Armenia is currently undergoing restructuring
and should be able to resume flights in March. "I would like our
fund to be presented not so much as a new Air Armenia shareholder
but as an investor," the Arka news agency quoted him as telling a
joint news conference with Arsen Avetisian, Air Armenia's director
and main official shareholder.
"We have understandings on $30 million [in investments] for the first
phase of operations but won't confine ourselves to that figure,"
he said.
On its website East Prospect presents itself as a fund manager
specializing in "problematic assets." Its investment portfolio,
estimated at $2.5 billion, mainly consists of mining operations
in Ukraine.
Air Armenia CEO Arsen Avetisyan said the airline will resume flights
in 2015 March. He said the airline is working now to bring back two
its planes which are in Amsterdam for an overhaul.
He said the agreement with East Prospect Fund was signed December 12
and now it owns 49 percent in Air Armenia. The remaining 51 percent
belong to the CEO.
According to Arsen Avetisyan, in 2015 the airline will operate
five aircraft to make flights to Thailand, China and some other
destinations.
In late October, Air Armenia decided to restructure its finances
and change the flights schedule after seeing an 80 percent drop in
air tickets sales. In a statement in late October Air Armenia blamed
the dramatic drop on a 'panic' among investors and customers after
Rosaeronavigatsia, a Russian federal air navigation service, said
the Armenian airline had huge outstanding debts.
Air Armenia began operating commercial passenger flights in 2013
after the bankruptcy and liquidation of Armenia's national air
carrier Armavia.
Eturbo News
December 20, 2014 Saturday
YEREVAN
YEREVAN, Dec. 20 -- A Ukrainian investment fund announced the purchase
of a 49 percent stake in Armenia's leading airline on Friday, pledging
to help restart soon its commercial flights that were suspended two
months ago.
Vladimir Bobylev, the chief executive of the East Prospect Fund,
pledged to invest at least $30 million in the troubled Air Armenia
carrier. Armenian news agencies quoted him as saying that it plans
to replace and expand the company's small fleet of aircraft in the
coming months.
It was not clear how much the fund, registered in the British Virgin
Islands but headquartered in Kiev, paid for the minority share. It
valued Air Armenia at $50 million on its website.
Air Armenia specialized in cargo shipments by air until Armenia's
flagship airline, Armavia, went bankrupt in April 2013, leading to
the full liberalization of the Armenian civil aviation sector. The
small carrier took over some of Armavia's flights later in 2013.
Air Armenia halted the flights to a dozen destinations in Russia and
Europe in late October as a result of a financial dispute with Russia's
national air navigation service. It accused the Rosaeronavigatsia
agency of scaring away its customers with false statements about its
outstanding debts. Aviation experts believe that the company also
struggled to compete with much larger Russian airlines.
According to Bobylev, Air Armenia is currently undergoing restructuring
and should be able to resume flights in March. "I would like our
fund to be presented not so much as a new Air Armenia shareholder
but as an investor," the Arka news agency quoted him as telling a
joint news conference with Arsen Avetisian, Air Armenia's director
and main official shareholder.
"We have understandings on $30 million [in investments] for the first
phase of operations but won't confine ourselves to that figure,"
he said.
On its website East Prospect presents itself as a fund manager
specializing in "problematic assets." Its investment portfolio,
estimated at $2.5 billion, mainly consists of mining operations
in Ukraine.
Air Armenia CEO Arsen Avetisyan said the airline will resume flights
in 2015 March. He said the airline is working now to bring back two
its planes which are in Amsterdam for an overhaul.
He said the agreement with East Prospect Fund was signed December 12
and now it owns 49 percent in Air Armenia. The remaining 51 percent
belong to the CEO.
According to Arsen Avetisyan, in 2015 the airline will operate
five aircraft to make flights to Thailand, China and some other
destinations.
In late October, Air Armenia decided to restructure its finances
and change the flights schedule after seeing an 80 percent drop in
air tickets sales. In a statement in late October Air Armenia blamed
the dramatic drop on a 'panic' among investors and customers after
Rosaeronavigatsia, a Russian federal air navigation service, said
the Armenian airline had huge outstanding debts.
Air Armenia began operating commercial passenger flights in 2013
after the bankruptcy and liquidation of Armenia's national air
carrier Armavia.