Renault to sign a rescue deal for the near-bankrupt AvtoVAZ

Article by Christian A., on August 29, 2010

The action of AvtoVAZ shareholders to rescue the near-bankrupt company came just in time. A rescue deal is set to be signed by the parties on Friday.

The signing, which is participated in by Russia's state-controlled investment group Russian Technologies, Moscow bank Troika Dialog and Renault, will coincide with Russian Prime Minister Vladimir Putin's visit to the French capital.

Russian Prime Minister's deputy chief of staff Yuri Ushakov told reporters about the parties expressed willingness to ink the agreement. Christian Esteve, leader of Renault's Eurasia management committee, is confirmed to have agreed to sign the agreement on Friday.

Earlier, Russian first deputy prime minister Igor Shuvalov had been quoted to have said that Paris talks would determine the future of AvtoVAZ. The carmaker, which is renowned for creating the Lada, owes nearly 60 billion rubles ($2.08 billion) in short-term loans.

It continues to suffer heavy losses and a slump in sales. AvtoVAZ is 25 percent owned by Renault, which paid $1 billion for the stake in the winter of 2007/08 to take advantage of what it hoped would be a fast-growing Russian market.

Russia is obviously eager for Renault to actively participate in the rescue of the company, either by sharing its technology or by building Renault cars at the AvtoVAZ plant.

Topics: renault, russia, avtovaz

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