Debt-shackled UTair (UT, Khanty-Mansiysk) has made a new effort to improve its repayment terms to eleven banks for restructuring three loans totalling RUB56.5 billion rubles (USD893 million). It has previously defaulted on two of these loans, on December 20, 2018 and June 20, 2019, without paying interest on them.
The carrier, Russia's fourth-biggest by passenger traffic, has now offered to raise the interest rate from a symbolic 0.01% to 9% on the largest syndicated loan of RUB23.7 billion rubles (USD375 million) and to stretch it to a 35-year payout period, three separate sources close to the matter told RBC news.
For a seven-year syndicated loan of RUB15.4 billion rubles (USD243 million), the carrier proposed splitting it into two parts, with 40% of the loan to be extended to 35 years at 0.01%, and 60% to be extended to ten years at 7.5%.
Sberbank, which is owed RUB17.4 billion rubles (USD275 million) in the third loan, has privileged conditions thanks to a guarantee by the Russian oil and gas giant Surgutneftegas, whose headquarters are, like UTair's, located in Surgut, Khanty-Mansi Autonomous Okrug.
In UTair's proposed new model, Sberbank's loan would roll over for eleven to twelve years at 9-10% per annum, but with only 4-5% of this paid and the other 4-5% accumulated and postponed. The final repayment of the body of the debt and the deferred interest would occur in the last two years, that is, after the repayment of the seven-year syndicated loan, sources have told Vedomosti.
As collateral, the airline has offered shares in Surgut Airport, in which it has a stake of 56%, as well as aircraft, engines, land, and buildings. In addition, it said it would order an audit of the financial model from KPMG at its own expense. In June, the carrier said it was willing to sell a 50% stake in the ground handling firm UTG to help pay interest on its loans.
