RUSSIA’S BASIC ELEMENT BUYS SOCHI AIRPORT FOR $206.6 MLN
RIA Novosti
20/11/2006 14:56 MOSCOW
Private Russian investment fund Basic Element (BasEL) has bought 100%
in the state-owned Sochi International Airport on the Black Sea for
5.504 billion rubles ($206.6 million) through an auction Monday.
The starting price for the airport in the resort city, which is
short-listed as a host city for the 2014 winter Olympics, was 3.5
billion rubles ($131.14 million) at the auction held by the Federal
Property Fund.
Sochi has been bidding to host the 2014 Olympic Winter Games, along
with Austria’s Salzburg and South Korea’s PyeongChang. The city bid
for the 1998 and 2002 Winter Olympics, but was rejected largely due
to its poor-quality Soviet-era infrastructure.
Russian television reported earlier in the day that the new owner
will have to rebuild the airport, while the state has pledged to
reconstruct the runways using money from the deal.
BasEl, owned by Oleg Dripaska, one of Russia’s richest men who also
controls Russian Aluminum (RusAl), holds combined assets of over $13
billion in energy, machinery, natural resources, financial services
and construction.
A total of five companies took part in the auction, among them
Renova, the asset management group controlled by Russian billionaire
Viktor Vekselberg. Renova majority owns Sual [RTS: SUAL], Russia’s
second-largest aluminum producer, which recently merged with
Deripaska’s RusAl and Switzerland’s Glencore to form the world’s
largest aluminum company.
Sochi International Airport received unwelcome publicity in May as
the destination of an Armenian airliner that crashed into the Black
Sea in stormy weather, killing all 113 passengers and crew on board.
Following a government order passed on July 3, 2006, the airport
was included on a list of companies to be privatized in 2006. The
airport has since been converted into a joint stock company with 100%
state ownership.