Aeroflot changes at top level

27-06-2017

The Board of Directors of Aeroflot has undergone major changes. Kirill Androsov, Managing Director of Altera Investment Fund SICAV-SIF, who had chaired the Board of Directors since 2011, was not re-elected preferring to leave the Board so as to avoid a conflict of interest as the fund decided to invest in aviation. According to Kommersant sources, Mikhail Poluboyarinov, a new Board member, ex-top manager of Aeroflot, currently a first Deputy Chair of Vnesheconombank’s Management Board, may replace him.
At their annual meeting, the Aeroflot shareholders elected a new Board of Directors. Kirill Androsov, Managing Director of Altera Investment Fund SICAV-SIF, who was elected as Chairman of the Board for the first time in June 2011 succeeding the then Minister of Transport Igor Levitin and had since permanently served in this capacity, was not voted into the Board this time.
According to Mr. Androsov’s comment, he voluntarily opted out of the re-election. “I decided to establish a stand-alone aviation investment business at Altera and asked not to be re-elected to avoid any talk about a potential conflict of interest,” the top manager was quoted as saying by Interfax. According to Kirill Androsov, Altera will focus on investments in air carriage, aircraft manufacturing, new construction materials and IT solutions. Kommersant’s informed source said that Mr. Androsov had sent letters to Rosimushchestvo and the Ministry of Transport in advance requesting them to ensure non-voting on his candidacy when preparing the voting instruction. According to another Kommersant source close to the Aeroflot Board of Directors, Mikhail Poluboyarinov, a new Board member, currently a first Deputy Chair of the Management Board of Vnesheconombank, will succeed Kirill Androsov as Board Chairman.
Alexander Shevchuk, Executive Director of the Association of Institutional Investors (API) uniting large investment funds, says that Kirill Androsov was actively committed to organizing the work of the Board of Directors, laying special emphasis on strategy, benchmarking, the management team remuneration and KPI system. The period of his chairmanship also included painful and contradictory decisions, such as Aeroflot’s equity participation in Transaero. The issues of voting quasi-treasury shares and new dividend policy also remained unsolved.
Mr. Poluboyarinov appeared on the list of candidates to the Board of Directors of Aeroflot for the first time this year, although he worked at the company as Chief Accountant and Deputy CEO in 2000-2009. The top manager possesses extensive experience of service as Director, previously sitting on the Boards of ROSSETI, Sovcomflot, Zarubezhneft, Rostelecom. Mikhail Poluboyarinov’s nomination to the Board of Directors of Aeroflot was announced in March and, just as with his predecessor Kirill Androsov, was made by Rosimushchestvo.
Russia's Federal Agency for State Property Management (Rosimushchestvo) is the majority shareholder of Aeroflot holding 51.2%. The combined share of Institutional investors if 34.8%, while individuals hold 6.1%. The air company’s subsidiary Aeroflot-Finance holds the treasury shares (4.5%), Rostec owns 3.3%, the remaining 0.1% stake belongs to the management team.
A total of 15 candidates were nominated for 11 seats on the Board: eight by Rosimushchestvo, three by Rostec-controlled Aviacapital Service, three by The Russian Prosperity Fund and The Prosperity Quest Fund, one by Aeroflot-Finance. As a result, Mikhahil Voevodin, Director General of VSMPO-AVISMA, was Rostec’s only candidate elected to the Board of Directors of Aeroflot. He was also nominated in 2016, but failed. “Mikhail Voevodin’s portfolio includes a 10-year experience of asset rehabilitation, investment attraction and company development into the world's leading market player,” one of the top manager’s acquaintances said. “This means that the key competence of the new Aeroflot Board member is his expertise and ability to make an objective appraisal of the current business situation and development opportunities." Institutional investors have, for the first time, brought two candidates to the Board: Lars Eric Anders Bergstrom (Senior Counselor at Sweden’s UB Företagsrådgivning AB) and Alexey Germanovich (a member of the Management Board at the “Development of St-Petersburg State University” Endowment Fund) who previously served as a member of the Aeroflot Board of Directors in 2012-2014.
Natalia Skorlygina, Dmitry Kozlov, Anatoly Jumailo

https://www.kommersant.ru/doc/3336489


“I AM LEAVING AEROFLOT WITH A SAD HEART”

Long-standing Board Chairman Kirill Androsov not re-elected
·        Alexander Vorobyov
 
·        / Vedomosti
The results of voting on the new Board of Directors (11 seats) at this year’s annual general meeting of the Aeroflot shareholders (which ended about 2:30 p.m. MSK on Monday) were a bombshell. Kirill Androsov, Managing Director of Altera Investment Fund SICAV-SIF, who joined the Board of Directors in 2008 and had served as Chairman of the Board since 2011 was not re-elected.
“This is my own decision, and I am leaving Aeroflot with a sad heart after all these years, since it means more to me than just a company where I represent the government,” Androsov commented for the media after the meeting. His decision, he said, was motivated by the opportunities to participate in aviation and aircraft building projects his fund missed in recent years avoiding a conflict of interest. “That’s why I made the final decision shortly before the shareholders meeting and wrote to Rosimushestvo requesting that they do not elect me,” he noted.
 
According to Androsov, Altera’s investment activities will focus on four segments: air companies (both new and existing, Russian and foreign air carriers), aircraft manufacturing, new construction materials and IT solutions for aviation applications. He would not comment on specific projects, though.
The Government of Russia represented by Rosimushchestvo (51.17%) has nominated eight people to the Board (including Androsov). The state-owned stake suffices to elect eight candidates to the Board as the quorum is incomplete (74% of the shareholders at this meeting). Instead of Androsov, the Government voted for Mikhail Voevodin, Director General of VSMPO-AVISMA, nominated by a Rostec entity.
Besides, two candidates nominated by Prosperity Capital Fund and backed by other financial investors and the Association of Institutional Investors (which has consolidated 12% of the votes) were elected to the Board: Alexey Germanovich, a professional independent director, a member of the previous Board) and Lars Bergstrom, a citizen of Sweden, Senior Advisor of Foretagsradgivning AB.
For the first time ever, two Board members represent Russian and international institutional investors (which own 30-35% of Aeroflot), an evidence of investors’ more careful attitude to the air carrier and ability to consolidate policies, Germanovich commented for Vedomosti. "Lars and I will stay committed to improving the level of corporate governance, our next task is to get the company to amend its dividend policy increasing the dividend payout ratio to 50% of its IFRS net profit from the current level of 25%," he added.
 

Dividends and the Board of Directors

Today, the Aeroflot shareholders approved the 2016 dividends equal to 50% of the IFRS net profit. The shareholders will earn RUB 19.4 billion, which sets a new record (the previous peak was in 2013 when the company paid about RUB 1 billion in dividends).
Another bolt from the blue was that Aviacapital-Service, a Rostec company engaged in aircraft leasing activities which owns about 3% of Aeroflot, was unable to elect CEO Roman Pakhomov whom it nominated to the Board by its stake.
The other seven Government representatives on the new Board include Mikhail Poluboyarinov (Deputy Chairman of Vnesheconombank, nominated instead of UniCredit Bank CEO Mikhail Alekseev) and six members of the previous Board re-elected this year: Yuriy Slyusar (President, UAC), Sergey Chemezov (CEO, Rostec), Vitaly Saveliev (CEO, Aeroflot), Igor Kamenskoy (Managing Director, Renaissance Broker), Dmitry Peskov (Director of the Young Professionals program, Agency for Strategic Initiatives), Vasily Sidorov. Besides, Dmitry Saprykin, CEO of Aeroflot’s subsidiary Rossiya airlines, was re-elected by the votes carried by quasi-treasury shares.
The shareholders have also approved the remuneration payable to the Board of Directors. The Board members serving until July 2016 will receive RUB 69.9 million, the Board members serving until today RUB 69.3 million rubles in total.
https://www.vedomosti.ru/business/articles/2017/06/26/696259-pokidayu-ae...

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