PARIS — Renault is backing near-bankrupt AvtoVAZ with financial support for a shake-up, but has refused Russian demands for a big cash injection, chief operating officer Patrick Pelata said Monday.
“They would love us to pour in lots of money because AvtoVAZ needs money, but we don’t have a lot of money. … We told them we cannot put more money in the joint venture,” Pelata said.
AvtoVAZ racked up first half losses of 19.4 billion rubles ($668 million) — nearly 10 times more than in the previous year — as demand collapsed.
Renault is backing a shakeup of the AvtoVAZ supply base and assembly platforms with an undisclosed financial sum adding to the 650 million euros ($958.1 million) that it spent on a 25 percent stake in the Lada maker in the winter of 2007-08, Pelata said.
“We’re going to pay our share. … It’s not small money, but it’s not half a billion,” he said, adding that discussions were also underway to build Renault Nissan cars at the AvtoVAZ plant in Tolyatti, as well as Ladas.
Separately, Christian Esteve, leader of Renault’s Eurasia management committee, told a news conference that the group aimed to keep its AvtoVAZ stake at 25 percent. He added that a joint production platform for AvtoVAZ, Renault and Nissan was being considered.
Esteve confirmed that an initial meeting with the Russian government would take place on Nov. 10 to discuss a “viable plan” for AvtoVAZ.
“We have started to work out the financial needs of the group and to negotiate with the Russian government,” he said, adding that he expected negotiations to last until about June 2010.
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