ROSTEC plans to write off 10 billion rubles debt of AVTOVAZ

ROSTEC plans to write off 10 billion rubles debt of AVTOVAZ


TASS.- Rostec plans to let Avtovaz off of a debt in the amount of 10 billion rubles, as told by the head of the state enterprise Sergei Chemezov to journalists.

“The issue of relocation (the transfer of the joint venture with Renault, the owner of Avtovaz – Alliance Rostec Auto BV – to the jurisdiction of the Russian Federation – as noted by TASS) is also related to the cancellation of those old debts that have remained with us, which amount to just over 20 billion rubles. We propose to repay the 10 billion rubles debt of OAT (the largest components manufacturer belonging to Rostec) to Avtovaz and pass the remaining 10 billion rubles into the capital of Avtovaz” – Chemezov explained.

Chemezov has added that Rostec will sell 8% of its share in Alliance Rostec Auto BV to Renault, as soon as the ownership of the company is transferred to the Russian jurisdiction (the share of the state enterprise in the joint venture will go down to 25%). “We have agreed with the new management to sign all necessary documents until the end of the year, in order to transfer the Dutch company to Russia. However, the process goes at a very slow pace. I have plans to resume negotiations with the management of Renault soon, in order to stimulate the efforts of their legal team in the right direction” – Chemezov continued.

The Russian side provided loans to Avtovaz in the amount of 75 billion rubles in the 2009-2012 period, alongside the financial contribution from French partners. Thereby, the total debts of Avtovaz exceeded 110 billion rubles. In due course, the parties agreed to regulate the main debts of the company, particularly through conversion to Avtovaz shares in two stages of recapitalisation (in 2016 and 2018), in other words, forgiving the company’s debts. Meanwhile, the stake of Rostec Auto BV in Avtovaz increased to 100% from the initial 64.6%. (Rostec’s share in the joint venture is now 32.6%).

The third stage of recapitalisation provides for the settlement of the remaining 20 billion rubles debt of the company through repayment of the OAT debt to Avtovaz in the amount of 10 billion rubles and the contribution of another 10 billion rubles to Avtovaz without increasing the share in the authorised capital and offsetting mutual claims, as explained by a source of information to Avtovaz.