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. Last Updated: 07/27/2016

Aeroflot Plans $1Bln Loan for Alitalia Bid

Aeroflot plans to borrow 800 million euros ($1 billion) to help finance its bid for a 39.9 percent stake in Italian carrier Alitalia, the Russian carrier's deputy CEO for finance and planning, Mikhail Poluboyarinov, said Wednesday

Four banks, including UniCredit, have been chosen to arrange the loan, Poluboyarinov said. The airline may sell eurobonds of the same amount to refinance the loan, he said. The bid comes as part of the airline's strategy to get a larger international exposure.

Aeroflot, along with the investment unit of UniCredit, Italy's largest bank by assets, is still bidding for a stake in Alitalia after U.S. buyout firm TPG dropped out. The government plans to sell its 49.9 percent stake in Alitalia in July, abandoning turnaround efforts after losses in six of the last seven years.

"The Italian Finance Ministry is giving out documents in portions," Poluboyarinov said. "We see additional complications for the purchase." He declined to elaborate.

Aeroflot also said Wednesday that its profits climbed 36 percent last year as it carried more Russian passengers and reduced costs. Net income climbed to $258.1 million from one year earlier, the company said. Sales advanced 18 percent to $2.98 billion. The results are under international standards and include the airline's Aeroflot-Don and Aeroflot-Nord units.

The earnings increase "is mainly due to increasing passengers, cost controls and effective management," said Mikhail Poluboyarinov, deputy CEO for finance and planning, in the statement.

Aeroflot last year served 8.8 million passengers together with its Aeroflot-Don and Aeroflot-Nord units.