Russian Technologies head Sergei Chemezov said Saturday that French carmaker Renault might raise its 25 percent stake in troubled Russian partner AvtoVAZ in the future, but won’t do so for now.
The announcement comes after AvtoVAZ said Friday that it planned to sign a new partnership deal with Renault on Friday.
“They said that they will at least keep their share package,” Sergei Chemezov said. “As far as raising their stake goes, it is hardly possible now, but in the future, there is a perspective that they are prepared to increase their stake.”
He said Prime Minister Vladimir Putin had offered Renault control of AvtoVAZ, which makes Lada cars and whose sales have collapsed this year amid the economic crisis. The French company had replied that it would “think about it,” he added.
“I think [it could happen] around 2013 to 2014,” Chemezov added.
State-owned conglomerate Russian Technologies and Renault currently each hold 25 percent of AvtoVAZ, which has debts of 59.9 billion rubles ($2.08 billion) and employs 96,000 workers in its headquarters city of Tolyatti.
Chemezov added that the government had agreed to increase AvtoVAZ’s share capital but did not provide further details.
On Friday, AvtoVAZ said it plans to sign a partnership accord Nov. 27 with Renault as the government demands help with overhauling the unprofitable manufacturer.
The agreement will include terms of support for the company, Igor Burenkov, a spokesman for AvtoVAZ, said Friday.
Putin may sign documents related to the carmakers during a trip to Paris next week as long as the companies reach a “relevant” agreement, said Dmitry Peskov, Putin’s spokesman.
Putin said Nov. 5 that, in addition to 54.8 billion rubles of state aid that Russia has already pledged, AvtoVAZ needs investments of 5 billion rubles to produce “competitive” models.
Christian Esteve, a Renault executive on AvtoVAZ’s board, said 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 report citing AvtoVAZ marketing chief Maxim Nagaitsev on the planned signing, declined to provide further details. Axelle de Ladonchamps, a spokeswoman for Renault, could not 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 closed down 1.9 percent at 16.5 rubles on Friday.
n State development bank Vneshekonombank said Friday that it was prepared to finance AvtoVAZ’s investment program after the carmaker restructures its debt.
“After the debt restructuring format is defined, after the strategy is drafted, we are ready, together with other banks, to take part in funding the investment program,” CEO Alexander Ballo said, Interfax reported. He said VEB had discussed the issue with other state banks Sberbank and VTB, Interfax reported.
(Reuters, Bloomberg)