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. Last Updated: 07/27/2016

New Aeroflot Board Plans to Stay the Course



Aeroflot's mysterious new shareholders voted three of their candidates onto the company's board at an extraordinary meeting Thursday but offered no vision for the flagship carrier's future.

The meeting was called at the request of Carroll Trading SA, an offshore company that bought a 10 percent stake in the airline this spring and is believed to have links to Chukotka Governor Roman Abramovich, part-owner of Sibneft and Russian Aluminum, or RusAl.

Carroll Trading and other offshore companies tied to Abramovich have reportedly accumulated up to 29 percent of state-controlled Aeroflot since spring. A source close to Aeroflot's board said the stake was 26.3 percent.

Their votes were spread between Mikhail Vinchel, general director of Prospekt?brokerage;?Alexander Nemtsov, managing director of Profit House, also a brokerage; and Aeroflot's deputy general director Alexander Zurabov.

Aeroflot general director Valery Okulov retained his seat, as did First Deputy Property Minister Alexander Braverman, Economic Development and Trade Minister German Gref, Transportation Minister Sergei Frank and Deputy Finance Minister Vladimir Chernukhin. Joining them was newcomer Yury Zaostrovtsev, the deputy director of the Federal Security Service, giving the state a total of five seats, down from seven at the last election in May.

Deputy Property Minister Sergei Molozhavy and Transportation Ministry official Vladimir Goryachev took their names off the ballot because they were too busy and there wasn't enough votes to go around, Molozhavy said.

Another state candidate, presidential aviation adviser Yevgeny Shaposhnikov, failed to get a seat, as did RusAl's Alexander Komrakov, who had been widely expected to win.

During the meeting, Vinchel and Nemtsov declined to speak and only grudgingly introduced themselves when summoned to the board's presidium.

Zurabov said earlier that no major revamp was expected -- words echoed Thursday by Okulov, who said the shareholders had not demanded any changes. "That confirms that the strategy for the company [adopted earlier] is correct," he said.

Later Thursday, Profit House said in a press release "board members representing minority shareholders ... intend to consolidate their efforts with state representatives and management to increase the effectiveness of the company."

"It looks like the [new shareholders] won't interfere," said United Financial Group analyst Yulia Zhdanova. "We have to wait and see what happens to management; if it's modified that means they will be interfering in the strategic development of the company."

Zhdanova added that the new shareholders, whoever they really are, might have decided to take a small stake in the carrier to be better placed to buy a bigger stake if the state decides to privatize more of the company.