29-Mar-2011 2:07 PM

Sheremetyevo and Vnukovo to be merged, renovated, and sold

Russia’s Transportation Ministry and the Moscow City Government announced they have agreed to sell state holdings in Moscow Sheremetyevo and Moscow Vnukovo airports after merging the two companies and renovating airport infrastructure (Reuters/Bloomberg, 28-Mar-2011). Sheremetyevo is wholly owned by the federal government and Vnukovo is 75% owned by the City of Moscow. The sale is part of plans to raise funds at address a budget gap, reduce the role of the government in the economy and improve Moscow’s transport infrastructure. The merged company may be valued at “tens of billions of rubles,” according to the Transportation Ministry. The state is believed to be paying between RUB45-50 billion (USD1.5-1.7 billion) for a 25% stake in Vnukovo that it does not already own, paying the cash to Moscow city authorities. Prime Minister Vladimir Putin said the two airports would have “significant synergies,” but did not provide a timeline for the merger process. He expects Moscow's airports to double their capacity to 100 million passengers by 2020. Construction work includes the construction of a third runway at Sheremetyevo. Sheremetyevo and Vnukovo are the second and third busiest airports serving the capital, behind Domodedovo. Moscow aims to raise as much as USD7 billion in the next two years from asset sales, which includes Vnukovo.

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