Reference
This document was drafted by the Ministry of Economic Development in accordance with Clause 4 of Government Directive No. 1916-r of November 3, 2011.
The directive includes the procedure and conditions for the disposal of the federally owned stake in Siberia Airlines, operating as S7 Airlines, which includes 26,126 shares and equals 25.4997% of the company’s stock capital.
The document was drafted on the basis of a report provided by Alfa Bank (hereinafter referred to as the Agent), which was chosen by the Government as the sole executor of the state contract for organising and implementing the disposal of these federally owned shares.
The independent assessor, Audit and Consulting, has evaluated the market value of S7 Airlines’ shares. Its conclusions have been examined by the self-regulating Association of Russian Evaluation Masters (ARMO).
The assessor concluded, with due regard for the S7 Airlines’ updated accounting report for 2012, that the package of 26,126 common shares is worth 1.1 billion roubles.
The Agent believes that the best way to dispose of the S7 Airlines’ share package is to sell it at an open auction with a starting price of 1.1 billion roubles.
The following companies have expressed interest in buying the stake: S7 Group (the controlling shareholder of S7 Airlines), Globus, Transaero and a consortium of Eurofinance-Nedvizhimost (Eurofinance-Real Estate) and Fondovye Strategicheskiye Initsiativy (Stock Market Strategic Initiatives).
S7 Group and the consortium of Eurofinance-Nedvizhimost and Fondovye Strategicheskiye Initsiativy have submitted the documents necessary for taking part in the bid.
The above bidders have made offers as part of the measures taken by the Agent. The best offer has been made by S7 Group, which is ready to buy the stake for 1,133,084,620 roubles and is therefore the recommended buyer.
Taking into account the structure of the transaction proposed by the Agent, the document stipulates the approval of the sale price and the buyer who has offered the highest price (in this case, S7 Group).
The document must also read that certain obligatory terms must be included in the sales agreement between the Agent and the Buyer. In particular, that the shares will be transferred only after the payment is made and the Federal Treasury confirms the receipt of the monies.
The document also sets the size of the Agent’s fees for organising and implementing the disposal of the federally owned stake in S7 Airlines.
This Directive is designed to maximally increase the revenues of the federal budget from the planned transaction and to guarantee the favourable development of S7 Airlines following the sale.