AvtoVAZ, Renault Accord Planned for End of Week
By Anastasia Ustinova
Bloomberg
MOSCOW — AvtoVAZ, Russia’s biggest carmaker, said it plans to sign a partnership accord on Friday with shareholder Renault as the government demands help with overhauling the unprofitable manufacturer. The agreement will include terms of support for the Tolyatti-based company, Igor Burenkov, a spokesman for AvtoVAZ, said in a phone interview. Prime Minister Vladimir Putin may sign documents related to the carmakers during a trip to Paris this week as long as the companies reach a “relevant” agreement, Dmitry Peskov, Putin’s spokesman, said by telephone last Friday. AvtoVAZ is 25 percent-owned by Renault, France’s second-biggest carmaker, with Russia’s government and Moscow-based investment bank Troika Dialog each holding another 25 percent. Russia would “welcome” Renault taking a controlling stake in AvtoVAZ, while the state may seek other partners should the French investor fail to join a rescue, First Deputy Prime Minister Igor Shuvalov said on state television Nov. 15. Putin said on Nov. 5 that, in addition to 54.8 billion rubles ($1.9 billion) of state aid that Russia has already pledged, AvtoVAZ needs investments of five billion rubles to produce “competitive” models. Christian Esteve, a Renault executive on AvtoVAZ’s board, said on Nov. 2 that the French company had an agreement in principle to maintain its holding by transferring technology in lieu of cash. Burenkov, confirming an Interfax news agency report citing AvtoVAZ marketing chief Maxim Nagaitsev on the planned signing, declined to provide further details. Axelle de Ladonchamps, a spokeswoman for Boulogne-Billancourt-based Renault, couldn’t immediately be reached for comment. Renault paid $1 billion for 25 percent of AvtoVAZ in 2007, when the Russian manufacturer’s stock cost about 50 rubles a share. AvtoVAZ fell as much as 84 kopeks, or 5 percent, to 15.95 rubles, and was down 2.3 percent in Moscow trading on Friday, valuing the carmaker at about $790 million.
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