Renault can take stake in AvtoVAZ to 50 percent

MOSCOW (Reuters) - Russia gave France's Renault RENA.PA a green light to buy up to half of AvtoVAZ AVAZ.MM, a move Renault's boss called "logical" and that could eventually put the country's biggest carmaker under foreign control.

After a meeting in Moscow on Tuesday Renault Chief Executive Carlos Ghosn said Russian Prime Minister Vladimir Putin had backed the increase of its stake in Lada maker AvtoVAZ to 50 percent from 25 now.

“The prime minister agreed Renault...could increase its share of the capital and that it can go up to 50 percent...How it will happen, and in what time frame, will be discussed with other shareholders,” he told reporters.

Sergei Skvortsov, a managing director at Troika Dialog, which is a potential seller of 20 percent of AvtoVAZ shares, added that the total Renault stake could reach 50 percent plus one share -- giving the French company a controlling stake.

Renault and its Japanese partner Nissan 7201.T have already agreed to build their own models at AvtoVAZ's sprawling plant in the one-industry Russian town of Togliatti -- a condition of the state bailout of the Soviet-era behemoth.

“We think it is logical development of our partnership. When we bought a 25 percent plus one share stake it was one of the conditions of our acquisition,” Ghosn said.

Renault could enter into talks to buy Troika’s 20 percent stake, while state conglomerate Russian Technologies remains a keen seller.

“If the alliance expressed the intention to increase its share, we are ready to support,” RussTech Chief Executive Sergei Chemezov told reporters.

He was quoted by Russian agencies this month as saying Nissan could also be a potential buyer of shares.

Renault bought the 25 percent stake in AvtoVAZ for $1 billion in early 2008, but a global collapse in car sales exposed the group’s outdated business model and pushed it to the brink of collapse.

Fearing widespread job losses and civil unrest, the government bailed out AvtoVAZ last year, while Renault and Nissan pledged commercial support.

Reporting by Darya Korsunskaya, Writing by John Bowker, Editing by Michael Shields