Without the support of banks Utair risks to fly never again
In a meeting with creditor banks on 21 March 2019 Utair offered its own version of a debt restructuring plan which together with its agent Raiffeisenbank had been developing for almost half a year.
The airline asked to completely write off a 12-year-old loan of 231 million euro and half of the seven-year loan of 215 million euros. This was reported to Russian news paper Vedomosti by employees of two creditor banks and confirmed by a person close to Utair.
The total debt of Utair is more then 1 billion euro. The airline owes Sberbank 239 million euros, 183 million for bonds and 82 million for the structures of the previous owner, Surgutneftegaz. Utair also asks to write off 80% of the debt to the oil company: a fully 12-year loan of 50 million euro and half a seven-year loan of 33 million euro, says a person close to Utair .
The company’s revenue for the first half of 2018 was 496 million euro and a net loss of 71 million euro.
Utair transported 1.1 million people in January – the fourth largest airline in Russia after the Aeroflot group, the S7 Group and the Ural Airlines. In 2015, Utair was also very close to bankruptcy.
The repayment of loans will begin in 2020, before that UTair only need to pay interest twice a year. On 20 December 2018, Utair didn’t pay about 13 million euro back on a seven-year loan, stating that otherwise there wouldn’t be enough funds left for operations.
Utair motivates the request for write-off by saying that she will not be able to serve this size of debt. In case of refusal, the airline faces bankruptcy.