September 30, 2009 / 5:26 AM / 10 years ago

Russia's VEB may get stake in AvtoVAZ - report

MOSCOW, Sept 30 (Reuters) - Russian state bank VEB may get a stake in the troubled carmaker AvtoVAZ AVAZ.MM by acquiring an issue of its infrastructure bonds and converting them into equity, Kommersant business daily reported on Wednesday.

French carmaker Renault (RENA.PA), which owns 25 percent of AvtoVAZ’s shares, may avoid dilution of its stake by buying into AvtoVAZ’s additional share issue and paying for it with a licence and equipment for assembling its Logan model, the paper said.

But state conglomerate Russian Technologies and investment bank Troika Dialog will see their 25 percent stakes diluted should the scheme go ahead.

AvtoVAZ was not available for comment.

Plunging demand has pushed AvtoVAZ to the edge of bankruptcy and it fears it may fail to secure another 12 billion roubles ($398 million) state support it needs to stay afloat.

VEB bank, which acts as a state agent to help key parts of Russia’s economy out of recession, may buy 40 billion roubles worth of AvtoVAZ bonds.

The company would use the proceeds to repay debt while VEB could convert the bonds into AvtoVAZ shares, the paper quoted a top manager at AvtoVAZ as saying.

AvtoVAZ has announced it will slash its workforce by a quarter and forecast a 35 billion roubles net loss for 2009. [ID:nLO165798]

VEB may also buy the stake in distressed German carmaker Opel from Russia’s biggest lender Sberbank SBER03.MM if Sberbank fails to find a domestic carmaker to be its industrial partner, Sberbank’s CEO has said. [ID:nNLP502374] (Reporting by Dmitry Sergeyev; Editing by Dan Lalor) ($1 = 30.19 roubles)

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