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Renault to invest 1 bln euro in Avtovaz additional capitalization

December 01, 2016, 14:31 UTC+3

Renault will become the majority shareholder of Russian carmaker Avtovaz after the company restructures its debt

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© Valery Sharifulin/TASS

MOSCOW, December 1. /TASS/. Renault will invest 1 bln euro in additional capitalization of Avtovaz, French Ambassador to Russia Jean-Maurice Ripert said on Thursday.

"Renault has decided to invest in additional capitalization of Avtovaz 350 mln euro, and then bring this figure to 1 bln euro," he said.

Chairman of the board of directors of Avtovaz Sergey Skvortsov told reporters earlier that Renault will become the majority shareholder of Russian carmaker Avtovaz after the company restructures its debt.

According to him, Russian state-owned corporation Rostec will still hold the blocking stake in Avtovaz, while stakes will be changing in the course of the issue of additional shares.

In 2015, Avtovaz posted the loss of 74 bln rubles ($1.2 bln) as calculated under the International Financial Reporting Standards (IFRS). The company attributed the loss to the costs on launching new models, the crisis on the car market, the decline in purchasing ability of the population and the devaluation of the ruble.

The company also breached the covenants under agreements with banks for the sum of 36.6 billion rubles ($572 mln).

Amid the financial difficulties the company’s Head Bo Andersson was replaced by former General Director of Renault in Romania Nicolas Mohr.

The Renault-Nissan alliance holds the controlling stake in Avtovaz, state-owned corporation Rostec owns the blocking stake. The shareholders managed the company via Alliance Rostec Auto BV.

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