News Line

Renault and Avtovaz reach an agreement

November 27, 2009

The agreement signed between the French and Russian manufacturer foresees an investment of 240 million euros by Renault technology and materials, as well as increased financial support from the Russian state. The brand will also help the diamond Avtovaz to develop production capacity of engines and transmissions and to develop an economic vehicle that will replace the Lada Classic. Furthermore, Renault and its partner Nissan, plan to use the available capacity of the plant in Togliatti (Russia) "to produce cars of both brands.Vehicles LADA brand products represent at least 70% of the production of Avtovaz "said a statement from Renault.

Among other measures, the Russian state will "increase support for Avtovaz 25 to 75 billion rubles (1.67 billion euros) to repay bank debt and to cover cash needs in the short term ' Avtovaz.

Vladimir Putin had said earlier that the Russian group anticipated a loss of 800 million euros in 2009 and needed at least 1.3 billion to cover its debts and its development.

Renault currently holds 25% of Avotvaz acquired for one billion dollars in February 2008. Other major shareholders are the Russian bank Troika Dialog (24.8%) and the public holding Russian Rosteknologuii (25.1%).

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