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. Last Updated: 07/27/2016

$70M Loan for Aviastar Up in Air

A $70 million investment deal aimed at breathing new life into Aviastar, once one of Russia's leading plane builders, has hit a snag that threatens to scuttle the process completely, the plant's management said Thursday.

General director Yury Ryazanov and deputy general director Valery Maltsev told a news conference the Russian investor who appointed them cut off funding for the heavily indebted plant after other major Aviastar shareholders failed to honor an investment deal.

The investor, New Commonwealth, had promised $70 million over two years to overhaul Aviastar and get production rolling again in return for a 26 percent stake. That would raise its stake in Aviastar, majority owned by state-controlled Tupolev design bureau, to 48 percent.

Ryazanov and Maltsev said Tupolev had failed to honor its own promises by handing over the promised shares more than three months after an April 26 deadline for the transaction.

No one at Tupolev or from Aviastar's board of directors was available for comment.