OREANDA-NEWS. Fitch Ratings-London-6 October 2015: The size of Public Joint Stock Company Aeroflot - Russian Airlines' financial exposure and operational involvement in financially unsustainable Transaero is unknown, even after Aeroflot's decision not to proceed with the acquisition of Transaero and Transaero's potential bankruptcy. Aeroflot's involvement with Transaero, even if it does not deepen, underpins Fitch's decision to place Aeroflot on the Rating Watch Negative (RWN) on 7 September 2015.

Aeroflot's Board of Directors decided not to extend the tender offer to acquire Transaero after Transaero's shareholders failed to submit a proposal by the set deadline. It was also reported by the press that Transaero's bankruptcy proceedings may commence. However, Transaero's passengers will continue to be transported by Transaero, Aeroflot and other Russian airlines until 15 December 2015.

We will resolve the RWN when we have more clarity about the costs Aeroflot will incur while managing Transaero's operations and transporting its passengers. We will also assess any financial recourse to Aeroflot in Transaero's bankruptcy proceedings, if they are executed.