Global Trade Alert

On 2 June 2016, the Russian government issued a state guarantee to a domestic aviation company. Through Decree No. 495, the government approved the procedure for issuance ofstate guarantees in 2016 to secure loans of the company "Ilyushin Finance Co.' for purchase of passenger aircrafts Sukhoi Superjet 100, to be subsequently transferred to 'Aeroflot' under a leasing scheme.

The purpose of the state guarantees is to secure the full repayment of the credit liabilities of "Ilyushin Finance Co.' which become due after 1 January 2019 and must be repaid within a time frame not longer than 13 years. In a broader perspective, their purpose is to support the local airplane manufacturing industry. The value of the state guarantee is not disclosed in Decree No. 495. However, according to unofficial online media article (1st provided source), they are to be in the amount of 3.5 billion Russian Roubles (ca. 54 million USD).

The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.