OREANDA-NEWS. On March 14, 2007, an auction for a state-controlled stake in S7 Airlines, formerly Sibir, a leading Russian air carrier, has been canceled due to a lack of bids, the Russian Federal Property Fund said Tuesday.

The auction to sell 26,126 ordinary non-documentary shares, representing 25,5% of the charter capital of S7, Russia's second-largest air carrier after Aeroflot, was earlier scheduled for February 14, but was later delayed until March 14.

"In line with standard regulations, we will draw the results of the auction tomorrow and will announce it as a frustrated one due to a lack of bids," Alexander Komarov, a spokesman for the Property Fund, said.

He added it was possible that another auction on the sale of the asset will be announced later, but that the decision "should be made by the Russian Federal Property Fund."

Bids for the auction were to be accepted until March 6 and the auction was to be public, both in terms of its participants and the form of submitting bids.

The initial auction price was set at 2,885,500,000 rubles (about $108,9 million). Each bidder had to deposit 450 million rubles (about $16,9 million) at the auction.

The government's stake in S7 was included in privatization plans in 2006.

S7, based in Novosibirsk, changed its name from Sibir in March 2006. The airline encountered a series of difficulties last year, the most severe being a tragedy in Siberia's city of Irkutsk July 9, when its Airbus 310 crashed on landing at the airport, killing at least 124 and injuring 70 out of 203 people on board.