The Renault-Nissan alliance and the state-run corporation Rostechnologii have founded the joint venture Alliance Rostec Auto BV, which will possess the whole stakes of the companies in the charter capital of the Russian carmaker AvtoVAZ and will become a controlling stockholder of the Russian largest car-making company and the owner of the Lada car brand.
The joint venture was founded to accelerate the output of new produce and the transfer of the technologies to AvtoVAZ, the Vedomosti daily reported. President of the Renault-Nissan alliance Carlos Ghosn, Director General of the state-run corporation Rostechnologii Sergei Chemezov and AvtoVAZ President Igor Komarov stated about the concluding of the deal in Moscow. The joint venture will speed up the development in Russia and will promote the competitiveness of AvtoVAZ, which is the leader of the Russian car making, Ghosn stated.
Renault-Nissan, AvtoVAZ, Rostechnologii and the investment company Troika Dialog signed a protocol of intent to found a joint venture for the transfer of control over AvtoVAZ in May 2012. The volume of investments of foreign partners has changed by the signing of the binding agreement, as Renault invested about 11.3 billion roubles (366 million dollars) in the joint venture and acquired a 50.1% stake in the joint venture, Nissan invested 11.7 billion roubles (376 million dollars) and acquired a 17.03% stake in the JVC. Last May Renault intended to invest 300 million dollars, Nissan – 450 million dollars.
In the deal Rostechnologii purchased a 32.87% stake in the joint venture and retains the blocking stake in AvtoVAZ. By 2014 the joint venture will buy out all the AvtoVAZ shares, which the company Troika Dialog Investments Ltd possesses now. Presently Rostechnologii owns a 28.89% stake in AvtoVAZ, Renault – 25%, Troika Dialog – 20.14%. Under the preliminary agreement Rostechnologii restructured the current credits to AvtoVAZ to the tune of seven billion roubles (238 million dollars), the deadline for the repayment of the remaining part of the debt was extended substantially on the noninterest bearing credit of 46 billion roubles (1.56 billion dollars).
The Alliance Rostec Auto BV board of directors will include three Renault-Nissan top managers – Renault Financial Director Dominique Thormann, Nissan Financial Director Joseph Peter, Renault Senior Vice-President and Chairman of Eurasia Region Bruno Ancelin, as well as two Rostechnologii officials – Director General Sergei Chemezov and Deputy Director General Igor Zavyalov. Carlos Ghosn will head the board of directors.
“Proceeding from the sum of 742 million dollars, which Renault-Nissan invests in the joint venture for the consolidation of the controlling stake and the Renault blocking stake, which is invested in the joint venture, the whole carmaker AvtoVAZ is estimated at three billion dollars, but the stock exchange capitalization of the company is estimated at 28 billion roubles today,” the Kommersant daily quoted Mikhail Pak from Atona as saying. Thus, “in the deal AvtoVAZ was estimated at the value that is thrice higher than the market,” the analyst said. In 2008 Renault purchased the blocking stake of the car making plant at a higher price of one billion dollars. On Wednesday, at the MICEX-RTS stock exchange the price of AvtoVAZ ordinary shares went down three percent to 15.2 roubles per share and the price of privileged shares reduced by 3.9% to 6.4 roubles per share. However, before the deal from early December to last Monday the prices of the AvtoVAZ shares went up by 40% to 17.15 roubles per share. The current decline can be taken as the correction after a vigorous growth amid of an expected signing of the documents over the deal.