S7 Airlines Co-Owner Filyov Agrees to Buy Control of Transaero

S7 Airlines co-owner Vladislav Filyov agreed to buy control of Russia's second-largest carrier, Transaero Airlines, after state-run Aeroflot PJSC declined to bail out its indebted competitor.

Filyov signed an agreement today to buy at least 51 percent of Transaero from Alexander Pleshakov, S7's spokesman said by phone. S7's Siberia Airlines is Russia's third-largest air carrier, according to the civil aviation agency. Transaero was slated to end its operations by Dec. 15.

Transaero is a casualty of Russia's deepest recession in six years, which has curtailed travel while the ruble's 34 percent decline against the dollar in the past year bloated the cost of leasing jets. The company has about 42 billion rubles (US$677 million) of foreign currency leases on jets, and a total debt load of 107 billion rubles as of December 2014, according to estimates from VTB Capital. Russia's largest bank, Sberbank PJSC, filed a bankruptcy suit against Transaero on Monday, news service RIA Novosti reported.

Transaero shares were unchanged at 6.8 rubles on the Micex index on Tuesday. the company's shares have plunged from 214 rubles since February 19.