MOSCOW (Reuters) - Russia’s government would consider any offer from Renault to increase its 25 percent stake in carmaker AvtoVAZ, Deputy Prime Minister Igor Shuvalov said on Tuesday.
Shuvalov said the success of the Lada maker’s debt restructuring depended on Renault and ruled out swapping AvtoVAZ debt for new shares in the company.
“The government is ready to consider Renault offers regarding increasing its stake in the company. But there is no such offer as yet,” Shuvalov told reporters, following a government meeting on the Russian car industry.
Russia’s hopes that overseas manufacturers would help revive the car industry were dealt a blow last week when General Motors
scrapped the sale of its European arm to a consortium including Russia’s Sberbank.
Sberbank’s participation in the Opel deal was intended to lead to a partnership between Opel and GAZ, whose chairman, Bo Anderson, was at the government meeting with Shuvalov.
Shuvalov conceded that GAZ, owned by oligarch Oleg Deripaska, needed a foreign partner but said GM’s decision to keep Opel would in “no way have an impact on Russia’s car industry.”
AvtoVAZ is mired in heavy losses following a collapse in Russian car sales in the first half of this year, while staring down a 59.9 billion rouble ($2.08 billion) debt pile, most of which is repayable in the short term.
The carmaker employs nearly 100,000 workers in AvtoVAZ’s base town of Togliatti on the Volga River southeast of Moscow and the government fears social unrest if there are major job losses, as alternative employment opportunities are scarce in the town.
Shuvalov said the government hoped to present a rescue strategy for AvtoVAZ on November 20, but needed to know Renault’s position before it could finalize its plans.
“Active work to clear AvtoVAZ debt and maintain AvtoVAZ (as a going concern) -- including social concerns -- should be linked to a consideration of Renault’s potential as an investor,” Shuvalov said.
He added there were no plans for a debt-for-equity swap -- which would dilute the Renault stake -- saying there was little point in banks owning shares in a car company.
Renault has so far avoided any commitment to increase its stake in AvtoVAZ, which it bought for around $1 billion in the winter of 2007/08.
A spokesman for the carmaker in Russia said the group was continuing to work with AvtoVAZ and the government on finalizing a deal.
Renault Chief Executive Carlos Ghosn said last week he had no plans to raise or reduce the stake.
Additional reporting by Gleb Stolyarov; writing by John Bowker; editing by Karen Foster