Aeroflot (AFLT) announced the Russian goverment intends to hold 50 billion roubles of stake out of its 80-billion rouble ($1 billion) new share offering, New share offering by Russia’s flagship airline Aeroflot is purposed for adding up financing to cope with the pandemic waged crisis .

Flights in Russia started to ground in April this year amid the pandemic and continued only a small portion of the air operations which resulted in the reduction of about half of the Russia’s airlines revenue along with  the pressure from the decline in the value of trouble. While analysts think some airlines would require state support in order to survive. While after facing the crisis, Aeroflot is going to hold a secondary public offering SPS in Moscow on Oct. 26.

Aeroflot said that it has succeeded to raise 39.1 billion roubles in its bookbuilding in which Russian state has 9.1 billion roubles. The Russian goverment has 51.17% share in Aeroflot while now it is also going to hold a pre-emptive rights in buying of more 40.9 billion roubles in the shape of equity while  Market investors will be buying 30 billion roubles worth of shares.

According to Russia’s Direct Investment Fund, it along with leading sovereign wealth funds from the Middle East are the anchor investors in this SPO

For this purpose, Aeroflot will set the share price at 60 roubles and actuated price of its stock to drop 8.8% to 60.08 roubles on Friday which was 65.86 roubles on Wednesday.

Russia will take the funds from its National Wealth Fund, a branch of the RDIF. Prior to this, Russian government also supported a its airline company during the pandemic from the funds taken from the National Wealth Fund.

In August, Airline passenger traffic of Russia has fell 35% on year on year basis which was even a significant recovery as compared to previous few months. There was seen an increase in domestic air travel because of Russians marking the holidays within country insead.

However, the Russian transport ministry anticipates the passenger air traffic to fall 53% to 60 million this year.