Bankruptcy looms for Russia's Transareo

MOSCOW - Russia's second-largest airline, Transaero, is in crisis as two major banks say they will apply for bankruptcy proceedings against the company following the collapse of a takeover plan.

Transaero has been struggling with debt and last month a government commission arranged for most of the company's shares to be taken over by the country's largest carrier, state-controlled Aeroflot.

However, the takeover has collapsed in recent days and on Friday two major Russian lenders, Sberbank and Alfa Bank, announced their intention to bring bankruptcy proceedings against Transaero, according to statements on a Russian federal company register.

On Friday, Aeroflot's general director Vitaly Savelyev was quoted by Russian news agencies as saying Transaero could stop all flights Oct. 15. Transaero shares fell by almost 20 percent in Moscow trading Friday.