Russian automaker GAZ, producer of the upscale Volga sedan, is preparing to sell 200 billion rubles ($51.8 million) worth of bonds to boost production of light trucks, company officials said Tuesday.


The two-year bonds -- a pioneering issue in Russian corporate finance -- will be made available to private and corporate investors Feb. 1, said Alexander Troitsky, GAZ's property and securities manager.


The sale is needed to finance an increase in output of the company's popular new 1.5-ton Gazelle trucks to 60,000 this year, Troitsky said in a telephone interview from the company's headquarters in Nizhny Novgorod. His deputy, Andrei Zotikov, said the plan required a total of 500 billion to 600 billion rubles.


"We have to get the money fast, and I do not rule out the possibility that the bonds will be sold cheaper than their face value," Zotikov said.


"Although we are a profitable company, we cannot draw on all our profits because we are charged with paying some municipal housing costs," he said, adding that the responsibility takes up to 20 percent of the factory's overall profits.


The securities will come in several categories, including 500,000 bonds at 100,000 rubles apiece, 100,000 bonds at 500,000 rubles apiece, 70,000 bonds at 1 million rubles and 10,000 bonds at 3 million rubles.


Zotikov said the company hopes to sell the bonds mainly to Russian commercial banks.


The company offers 10 percent annual interest on the hard currency value of each bond. Once a bond is purchased, the sum paid for it will be converted into dollars, and at maturity the dollar amount plus the 10 percent in profits will be converted back into rubles, according to Troitsky.


Zotikov said he expected the February issue would be sold completely within six months to one year.


GAZ put the Gazelle trucks on line last August and produced about 13,000 by the end of the year. Troitsky estimated Russia's market could consume up to 300,000 such vehicles annually.


Troitsky said GAZ intended to engage in serious competition with other light-truck producers, like the Latvian RAF and the Ulyanovsk car factory.


Troitsky said the company would use some of the funds from the bond sales to design a range of modified Gazelles, which would include vans used by ambulance services and minibuses.