Bloomberg News

Aeroflot Gains 1st Day in 6 as Navalny Joins Board: Moscow Mover

June 26, 2012

OAO Aeroflot rose for the first day in six on bets the election of Russian opposition leader and anti-corruption blogger Alexey Navalny to the state-controlled airline’s board will improve efficiency.

Aeroflot shares advanced 0.7 percent to 42.44 rubles by the close in Moscow. The stock has declined 11 percent this quarter.

“Investor sentiment is improving on the Navalny news,” Peter Westin, chief strategist at Aton Capital in Moscow, said by phone. “People are clinging onto any positive corporate governance signs in this environment.”

Navalny, a Moscow-based lawyer and shareholder in Russian companies including OAO Gazprom and OAO Rosneft, was elected to Aeroflot’s board yesterday, according to an e-mailed company statement. Billionaire Alexander Lebedev, who controls about 15 percent of Aeroflot as an independent director, nominated Navalny, whose apartment was searched by police amid protests against President Vladimir Putin this month.

“Navalny’s election to the board of directors could theoretically boost the company’s capitalization,” Lebedev said today. “We’re trying to create a precedent of a state company that is managed as well as a private one.”

Minority Shareholders

Russia controls 51 percent of Aeroflot, according to data compiled by Bloomberg. Aeroflot’s capitalization is 47.1 billion rubles ($1.43 billion).

“Aeroflot won’t interfere with Navalny’s political work,” Anna Veduta, Navalny’s spokeswoman said by phone from Moscow. “His main activity this entire time has been the fight against corruption. This is a logical move.”

Navalny doesn’t plan to join any other corporate boards, according to Veduta.

“Minority shareholders have gained their representative in the board of directors,” Kirill Bagachenko, who manages about $3 billion in Russian equities, including Aeroflot shares, at TKB BNP Paribas Investment Partners in St. Petersburg, said by phone on June 25. “This may improve the corporate practice.”

Igor Lojevsky, executive director of Deutsche Bank AG in Moscow, also joined the board, according to the statement.

“Those who fear Navalny are the ones that have something to fear,” Aeroflot Chief Executive Officer Vitaly Savelyev said in February after the nomination. Savelyev was re-appointed to the board, according to yesterday’s e-mailed company statement.

To contact the reporter on this story: Ksenia Galouchko in Moscow at

To contact the editor responsible for this story: Gavin Serkin at

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