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AvtoVAZ, Renault May Swap Stakes

The government could strengthen its car industry's ties with France, possibly through the governments swapping equity in their flagship carmakers, Prime Minister Vladimir Putin said Wednesday.

"There are swap options with the French government — which owns a stake in [France's] Renault. We have discussed it. It could be a good cooperation," he said during a discussion with business leaders in Zhukovsky, near Moscow.

Russia and France were discussing a swap of 3 percent in Renault for a stake in AvtoVAZ, a source from Russian Technologies said, Interfax reported.

Renault already owns 25 percent of Russia's AvtoVAZ, and Putin said it was welcome to increase its share of the firm.

But speaking later, AvtoVAZ chairman Sergei Chemezov said further partnership talks were at a fledgling stage.

"It's a pity this issue was raised — it's a very raw topic. We have not started to discuss it," he said.

He added that an agreement on Renault's 240 million euro ($293.7 million) noncash aid package would be signed in mid-July. The French carmaker pledged the funds alongside 60 million euros from partner Nissan late last year.

The AvtoVAZ-Renault arrangement should be a model for foreign business partnerships, Putin told Christian Esteve, head of Renault's Eurasia management committee.

"We are not dividing anybody into categories of friends and strangers ... You should have no doubt we will support you," he said.

Renault paid $1 billion for its stake in AvtoVAZ at the top of the market in early 2008, but watched in horror as sales collapsed amid the global economic crisis the following year.

AvtoVAZ was saved from bankruptcy by the state, while Renault agreed to start building more of its own cars in Russia.

Putin said Russia's cash-for-clunkers incentive scheme — credited with rescuing the industry as a whole — could be extended to trucks if required.

Renault has no plans to raise its stake in AvtoVAZ, spokeswoman Sylvie Blanchet said by phone. “We’ve always said we’re very happy with our 25 percent stake, and we continue to be happy with it,” she said.

The French government could not immediately be reached for comment.

(Reuters, Bloomberg)

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