A Ukrainian investment fund announced the purchase of a 49 percent stake in Armenia’s leading airline on Friday, pledging to help restart soon its commercial flights that were suspended two months ago.
Vladimir Bobylev, the chief executive of the East Prospect Fund, pledged to invest at least $30 million in the troubled Air Armenia carrier. Armenian news agencies quoted him as saying that it plans to replace and expand the company’s small fleet of aircraft in the coming months.
It was not clear how much the fund, registered in the British Virgin Islands but headquartered in Kiev, paid for the minority share. It valued Air Armenia at $50 million on its website.
Air Armenia specialized in cargo shipments by air until Armenia’s flagship airline, Armavia, went bankrupt in April 2013, leading to the full liberalization of the Armenian civil aviation sector. The small carrier took over some of Armavia’s flights later in 2013.
Air Armenia halted the flights to a dozen destinations in Russia and Europe in late October as a result of a financial dispute with Russia’s national air navigation service. It accused the Rosaeronavigatsia agency of scaring away its customers with false statements about its outstanding debts. Aviation experts believe that the company also struggled to compete with much larger Russian airlines.
According to Bobylev, Air Armenia is currently undergoing restructuring and should able to resume flights in March. “I would like our fund to be presented not so much as a new Air Armenia shareholder but as an investor,” the Arka news agency quoted him as telling a joint news conference with Arsen Avetisian, Air Armenia’s director and main official shareholder.
“We have understandings on $30 million [in investments] for the first phase of operations but won’t confine ourselves to that figure,” he said.
On its website East Prospect presents itself as a fund manager specializing in “problematic assets.” Its investment portfolio, estimated at $2.5 billion, mainly consists of mining operations in Ukraine.