Aeroflot CFO Says Airline Does Not See Need For New Borrowing In Near Future
Russian airline Aeroflot does not see the need for new borrowing in the near future after creating a safety cushion ahead of the autumn season, its chief financial officer, Andrey Chikhanchin, told Reuters.
"At the moment, we have about 100 billion roubles ($1.39 billion) in debt (excluding lease payments), while the account balances are quite large. The debt is mostly secured by the account balances," Chikhanchin said.
The airline has 24 billion roubles of undrawn loans under state guarantees in reserve, Chikhanchin said.
It has not experienced difficulty financing its activities during the summer but secured liquidity ahead of the traditionally difficult autumn season, he said.
Aeroflot placed exchange-traded bonds amounting to 24.65 billion roubles at a rate of 8.35% in June, having initially planned to raise 15 billion at 9.15%.
According to Chikhanchin, the total demand for these bonds has reached almost 70 billion roubles.
Part of this debt is loans under state guarantees, he said.
Diversifying Borrowing Instruments
"We are diversifying our borrowing instruments. State-guaranteed loans would have been cheaper, but we decided to use another available instrument," he said, adding that the company is targeting an average debt rate of about 7%.
Aeroflot usually accounts for almost half of the Russian market. Last year, the COVID-19 pandemic resulted in a loss of 123 billion roubles, its worst in at least 10 years, with passenger traffic slumping 53% to 30.2 million.