Rostec plans to get the direct ownership of AVTOVAZ with Renault-Nissan

Rostec plans to get the direct ownership of AVTOVAZ with Renault-Nissan

Prime – Rostec plans to liquidate Alliance Rostec Auto B.V and get the direct ownership of AVTOVAZ with Renault-Nissan in the proportion of 25/75 within the next 12-18 months, as told by the head of the state enterprise Sergei Chemezov.

The Alliance Rostec Auto B.V joint venture is registered in the Netherlands and currently holds 64.6% share of the largest car factory in Russia.

“The second stage (recapitalisation of the company) will be completed somewhere in July and our debts will be converted – 51 billion rubles and 32 billion rubles Renault-Nissan. As a result, we will have 25% of the shares and Renault-Nissan around 75%. The joint venture (Alliance Rostec) will have almost 99% share. The operations will run through Alliance Rostec for the moment, however, in my opinion, we will liquidate the company in 12-18 months, to be owned directly here in Russia, said Chemezov to journalists on the sidelines of the SPIEF.

Earlier this year, AVTOVAZ placed 2.9 billion shares within the frame of the first stage of the recapitalisation and raised 26.141 billion rubles. In the course of the additional issue, the share of the main holder – Alliance Rostec – fell to 64.6% from 74.51%. A package of 24.09% was acquired by the Renaissance Capital structure, financed by Renault. A number of analysts are of the opinion that Renaissance could acquire a share in the capital of AVTOVAZ in the interests of the existing shareholders, since the motives for the purchase of the package make sense neither in the logic of portfolio nor for a strategic investor

The conversion of loans issued to AVTOVAZ by Rostec and Renault-Nissan to company shares is intended at the second stage of the recapitalisation. The shareholders of the car plant have already approved an additional issue of securities for 9.25 billion shares, placed for 10.3 rubles in the interests of Alliance Rostec Auto B.V.