SSJ100 manufacturer confirmed debt negotiations

Earlier this week Russian media reported that the Sukhoi Civil Aircraft Company (SCAC) is on edge of bankruptcy. According to Lenta.ru, which quotes „Kommersant“, the SSJ100 manufacturer will probably be forced to declare credit event should it fail to find additional financing sources. Meanwhile, SCAC ensures that the current financial state of the company allows it to fulfill all its commitments.

The SSJ 100 project is largely carried out via engaging external credits. More than 60% of the project cost was financed by JSC “Sukhoi Civil Aircraft” via credit resources. Currently the debts of the company surpass $2 billion.

Work with “Sukhoi Civil Aircraft” credit portfolio and securing the debt service obligations has already been in progress by now. In 2012 VEB opened line of credit for $1 billion for SSJ 100.

At the same time, SCAC confirmed the rumors that it is looking for additional measures which would help to improve the financial state of the company. In particular, together with JSC “UAC” and other structures the analysis of possible debt restructuring is carried out. Possible SSJ 100 program support options are also under discussion – both direct support aimed at liquidity upsurge and ownership capital increase, and aircraft sales financing support measures.

SSJ 100 order portfolio consists of 179 aircraft. In 2011 5 aircraft were built, in 2012 – 12. Since the beginning of this year 10 aircraft have been produced already, 26 will be produced this year in total. In 2014 it is planned to produce up to 40 aircraft.

According to the business plan, break-even is planned starting from 2015, when total revenue will amount to more than $1.5 billion. By 2018 total revenue will amount to more than $2 billion. Operating surplus will be achieved this year and starting from 2015 “Sukhoi Civil Aircraft” plans to achieve positive net cash flow.