Near-bankrupt Russian car firm to be rescued

Russia's state-controlled investment group Russian Technologies, Moscow bank Troika Dialog and French car-maker Renault are all prepared to sign a deal to coincide with Russian Prime Minister Vladimir Putin's visit to the French capital, Ushakov said.

"An agreement on restructuring conditions will be signed between Russian Technologies, AvtoVAZ, Troika, Renault. This document is a result of several months work," he told reporters.

His comment came a day after Russian first deputy prime minister Igor Shuvalov said the Paris talks would determine the future of the Lada-maker -- which owes nearly 60 billion roubles ($2.08 billion) in short-term loans and is struggling with 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 keen for Renault to play an active part in the rescue of the company, possibly by sharing its technology or building Renault cars at the AvtoVAZ plant.

AvtoVAZ employs nearly 100,000 people at its base in Togliatti -- a one industry town in Central Russia -- and the government fears major social unrest if there are mass lay-offs.

Renault was not available for comment.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Terms

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos
 Respond to this email