VEB could buy shares in ailing Russian car giant AvtoVAZ
Friday, 09 Oct 2009
RIA Novosti reported that Russian state run national development bank Vnesheconombank could become a shareholder in AvtoVAZ as a condition for state support for the ailing Russian car giant.
Kommersant said Russia's Finance Ministry and Economic Development Ministry have taken a tough stance on continuing state support for AvtoVAZ saying the next tranche of RUB 12 billion ill be granted to the carmaker, if its creditors represented by state-run banks join the car giant's share capital,
The French car company Renault, which holds a blocking 25% interest in AvtoVAZ said it is against the deal as its stake would be diluted if it goes ahead. However, AvtoVAZ has worked out a scheme enabling Renault to retain its stake while the state, represented by VEB, will become a new shareholder through a reduction of the stakes held by the Russian Technology Corporation and Troika Dialog brokerage, the paper said.
Mr Alexei Kudrin Russian Finance Minister said the state would be providing financial support to AvtoVAZ for the last time.
Economic Development Minister Elvira Nabiullina explained his position, saying that AvtoVAZ was over credited as it owed more than RUB 40 billion to creditors that included state-run banks Sberbank and VTB. The state could join the carmaker's capital if AvtoVAZ's debts were converted into shares to make state-owned banks the final holders of the car giant's stock.
Sberbank declined to comment on this information while VTB could not be reached for comment. Meanwhile an AvtoVAZ top manager yesterday told Kommersant that AvtoVAZ could issue infrastructure bonds worth almost RUB 40 billion which will be purchased by Vnesheconombank to enable the carmaker to meet its current liabilities. Subsequently, AvtoVAZ will convert the bonds into shares, making VEB one of its shareholders.
Kommersant source said the stakes of Russian Technology Corporation and Troika Dialog, which hold 25% each, will be diluted in this case but both companies have no objections, while Renault could retain its stake, if it pays for AvtoVAZ new share issue with its license for Logan cars and assembly equipment.
