January 24, 2009 / 2:21 PM / 10 years ago

Russia's VEB takes over Hungarian airline Malev

BUDAPEST, Jan 24 (Reuters) - Russia’s state-owned Vnesheconombank will take over Hungarian national airline Malev [MALV.UL] within days, and will take on Russia’s Aeroflot (AFLT.MM) as a strategic partner, officials said on Saturday.

VEB, one of Malev’s chief lenders, will take over the airline to press ahead with restructuring and already has plans to resurrect the ailing company, Viktor Zubkov, Russia’s First Deputy Prime Minister told a news conference in Budapest.

“The previous owner’s not very assertive styles and the global economic crisis have prompted us to seek a solution and finally put this issue in order,” Zubkov said.

“We have managed to bring in VEB, a new owner, and also found a strategic partner in Aeroflot, Russia’s biggest airline.”

Hungarian Finance Minister Janos Veres said the takeover was necessary as Malev’s chief owner, Russian businessman Boris Abramovic, who also owns KrasAir, failed to meet the conditions set out in the privatisation contract.

“The steps taken since the privatisation have not been adequate to ensure the future of the airline,” Veres said.

“That’s why the company’s lending bank, Vnesheconombank will take over within the next several days, ahead of Malev’s shareholder meeting.”

Veres said that Malev will remain a European Union airline as it will remain majority owned by an EU investor as it was under Abramovic.

Veres declined to say who will own the shares not acquired by VEB.

Reporting by Balazs Koranyi; editing by Patrick Graham

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