Russia is selling part of Aeroflot due to a budget shortfall
The Russian government plans to sell nearly a quarter of its shares in Aeroflot to plug the hole in the federal budget, which is rapidly spiraling out of control. The decision on partial privatization was made against the backdrop of a growing public finance deficit. The sale is expected to bring in tens of billions of rubles, but it does not solve the systemic problem, according to Russian media.
For the first time in a long while, Russia has decided to put a large stake in a state-owned company up for sale, and this move is directly linked to attempts to patch up the federal budget, which has accumulated a multi-billion-ruble deficit in the first months of the year—a deficit that continues to grow faster than the government had anticipated.
Rosimushchestvo has announced a tender to select an organizer for the sale of a 23.76% stake in Aeroflot, the national carrier that serves tens of millions of passengers annually, effectively making this deal one of the largest privatization transactions in recent years.
The statement notes that this stake is part of the state’s total holding, which amounts to 73.8%, meaning that approximately one-third of the state’s holdings are being sold, while another quarter of the company’s shares are already traded on the stock exchange.
“These shares are planned to be sold through stock market mechanisms, where about 25% of the company’s shares are already traded,” the Rosimaya statement reads.
According to analysts’ estimates, the sale could bring in about 45 billion rubles, based on Aeroflot’s current market capitalization, which stood at approximately 187 billion rubles—or about $2.6 billion—at the time of the last trading session.
The proceeds are planned to be directed directly to the federal budget, which already has a significant deficit this year, measured in trillions of rubles, and, according to financial reports, the actual gap between revenues and expenditures has exceeded even the annual forecasts by more than one and a half times.
Experts note that the sale of a stake in a major state-owned company appears to be a necessary step to cover current expenses, but it does not alter the overall trend of rising budgetary burdens, which remains one of the key challenges for the Russian economy.
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