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Russia has drafted a support plan for Aeroflot where the government and state bank VTB would buy into a new share issue by the country’s biggest airline, which has been hit by the coronavirus crisis, two sources with direct knowledge of the plan told Reuters.

The Russian Direct Investment Fund (RDIF) may take part in that share issue along with the state and VTB, one of the sources said, adding that under the plan, Aeroflot would be issuing new shares worth $1.15 billion.

Russia is following the example of Lufthansa, where the German government will take a 20 percent stake as a part of a $10 billion bailout, the source added.

The state plans to buy shares worth $720 million, with VTB and RDIF buying shares worth $215 million each, he added. The second source said that the new share issue was expected to be “significant.”

An RDIF spokesman told Reuters that the fund, along with some international partners, was considering investing in Aeroflot, without providing details.

“We don’t have such information,” Aeroflot said in emailed reply to a Reuters request for comment. A government spokesman and VTB did not reply to requests for comment.

Both sources said that VTB planned to sell its stake in Aeroflot later. They did not give a shareholding breakdown after the planned new share issue, or say when the bank may sell out of Aeroflot.

Aeroflot, 51.2 percent state-owned, was hit hard by the coronavirus pandemic, as countries shut down borders, while Russians were in lockdown for two months from late March.

In March alone, the carrier’s passenger traffic slumped more than a third from a year ago and was down 12.3 percent for the quarter, based on Aeroflot data published in April.

Aeroflot Group, which includes Russian flag carrier Aeroflot as well as Rossiya, Aurora and low-cost airline Pobeda, has a Russian market share of almost 50 percent based on 2019 data.

(Additional reporting by Gleb Stolyarov and Anastasia Lyrchikova. Writing by Katya Golubkova. Editing by Jane Merriman)

This article was written by Tatiana Voronova from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Photo Credit: The Russian state could buy shares worth $720 million, and two banks $215 million each, to inject cash into Aeroflot. Yury Orlov / Unsplash