Utair throws off 30 billion ballast

The airline has asked banks to write off the debt, otherwise it threatens to go bankrupt.
On March 21, Utair, at a meeting with creditor banks, offered its own version of debt restructuring, which, together with its agent, Raiffeisenbank, had been developing for almost half a year. The airline asked to completely write off the 12-year-old syndicated loan and half of the seven-year syndicate - according to them it should, as of February 14, 2019, 23.7 billion and 15.4 billion rubles. respectively. This was reported to Vedomosti by employees of two creditor banks and confirmed by a person close to Utair.

The total debt of Utair is 74.7 billion rubles. 17.4 billion rubles. the airline owes Sberbank, 13.3 billion for bonds and 4.9 billion for the structures of the previous owner, Surgutneftegaz. The carrier does not offer any write-offs on these debts, bank employees said.

Thus, Utair asks to write off 31.4 billion rubles, which is 40% of the debt, or 80% of syndicated loans. At the same time, the company's revenue under IFRS for the first half of 2018 amounted to 36 billion rubles, a net loss of 5.2 billion.

Utair transported 1.1 million people in January - the fourth result after the Aeroflot group, the S7 Group and the Ural Airlines. Back in 2015, Utair was close to bankruptcy. But then the lenders restructured all the debts into two syndicated loans. It did not last long. In the autumn of 2018, the company announced that, due to rising prices for jet fuel, it would again require restructuring. In October-November, at one of the first meetings with the bankers, Utair already spoke of the need to write off 75% of the syndicate. But then the airline didn’t do any calculations, then this figure was no longer called, says an employee of one of the banks.

The repayment of syndicated loans will begin in 2020, before that you only need to pay interest twice a year, and the 12-year rate is still symbolic. December 20, Utair did not pay about 1 billion rubles. on a seven-year loan, stating that otherwise there would be no funds left for operations. In February, the syndicate decided not to resort to direct debiting of funds from the airline’s accounts and not to foreclose on collateral, but this issue can be again put to the vote at any time.

Now the request for write-off is the result of the development of the financial model and the estimation of income for many years to come. Utair motivates her by saying that she will not be able to serve this size of debt, say two bankers. In case of refusal, the airline faces bankruptcy. And then lenders will receive several kopecks per ruble of debt, one of them adds. At the meeting, the airline admitted that Rosaviatsiya should withdraw the certificate of the operator from it, the banker continues. The condition of net assets is the first and main criterion of Rosaviatsia in the financial assessment of carriers, follows from the assessment methodology.

The representative of Utair at the request of "Vedomosti" did not respond. Bankruptcy at the meeting was not discussed, according to a person close to the carrier. The representative of Rosaviation on March 24 was unable to provide comments.

Why it is not proposed to partially write off other debts? The loan from Sberbank, as explained by Utair, provides for a guarantee of Surgutneftegaz and it will be difficult to agree on the cancellation of it, the reason is given by the interlocutors of Vedomosti. Surgutneftegaz controlled Utair for many years through its pension fund, but now has no formal relationship with the airline. However, Sberbank is ready to extend its loan term from 7 to 11 years and agree to pay it off only after the syndicate is fully paid off, says one of the Vedomosti interlocutors. Sberbank's share in the syndicated loan is 5 billion rubles.

The guarantee of Surgutneftegaz is not an argument, all the more it is not clear whether there is any guarantee at all, an employee of the creditor bank is outraged. There is no guarantee, says the top manager of the air transport company, who knows about this from the staff of Sberbank.

All banks, except for “Russia”, have created 100% of reserves for Utair loans, says an employee of a lending bank. Therefore, he adds, the carrier’s bankruptcy will not cause anyone serious problems; many are ready for such a scenario.

“During the restructuring of bank debt, negotiations are held separately for each obligation,” says Alexander Guschin, an analyst at ACRA. - Sberbank, as a state bank, on the one hand, takes into account the social function of Utair, on the other hand, wants to observe its own interests. It’s a common situation that a larger lender is trying to achieve better conditions for himself. ”

"Sberbank is always trying to find the most balanced solution that will allow both the bank and the borrower to continue to work to repay the debt as efficiently as possible," said his representative. It was not possible to get comments from other Utair lenders. Representatives of Russia, IBC, Unicredit Bank, MTS Bank, Svyaz Bank, Surgutneftegazbank, Uralsib, Rus and Niko Bank did not respond to Vedomosti requests, Trust refused to comment.