A socialbites.ca source at AvtoVAZ said the French have begun preparing the plant for sale to a Russian owner.
Potential bidders for the acquisition include a Rostec subsidiary and structures of the Ministry of Industry and Trade.
The first holds 32.4% stake in the Russian JV Lada Auto Holding (since this year, AvtoVAZ has been transferred from the Dutch offshore to the jurisdiction of the Russian Federation), the remaining 67.6% is owned by Renault.
According to the interlocutor of socialbites.ca, in May most of the foreign management of AvtoVAZ will leave the factory or be transferred to remote work. This information has been confirmed by two other sources. One of the company’s executives noted that some foreign personnel had left Tolyatti before, some would do so after a few weeks and would never return.
socialbites.ca asked the press service of Renault headquarters, as well as the AvtoVAZ plant, the Ministry of Industry and Trade and Rostec for comments on the upcoming agreement on the sale of AvtoVAZ. They have not yet responded to the broadcast’s questions.
At the same time, Groupe Renault financial director Thierry Pieton said in a quarterly report on Friday that the French side has managed to “make progress” in negotiations with the Russian authorities on the future of AvtoVAZ, Automotive News Europe reported. Pieton did not reveal any details of these negotiations.
The financial director of the group presented AvtoVAZ’s financial results for the first quarter of 2020. Thus, AvtoVAZ’s contribution to the Renault Group’s total turnover reached 527 million Euros, which is 23.1% lower than in the first three months of 2021. At the same time, the Renault Russia division’s quarterly revenue decreased by only 2.1% to 367 million euros.
On March 23, Renault announced the suspension of its business in Russia. Later, the concern said that against the background of events in Ukraine, as well as problems with the supply of components, it considers the exit from its stake in AvtoVAZ as a solution.
Now the value of the assets of the Volga Automobile Plant can reach about 1.2 billion euros,
– believes this is a rough guideline, says Sergey Burgazliev, an independent consultant in the automotive industry. However, he stresses that the amount could differ significantly in both directions as the parameters of the transaction, the list of assets offered for sale, other conditions and a possible discount are not yet clear.
The business group in Burgazliev, Tolyatti, says that the cost of the VAZ plant in Izhevsk could be 300 million euros – about 850-900 million euros. The deal may also include the Moscow plant “Renault Russia”, the expert estimates its value at 350-450 million euros.
Burgazliev is confident that the cooperation of different companies should be preserved to some extent, this will allow the Russian automobile plant to preserve its industrial potential.
“First of all, it seems most logical that AvtoVAZ and Renault signed agreements on the supply of car kits for these models based on their units. If the French leave completely, breaking the supply chains of components, AvtoVAZ will be left with three Lada cars: Granta, Niva and Vesta,” explains Burgazliev.
In addition to quality and new modern models, the most valuable thing Renault has given AvtoVAZ during all its years of management is to streamline things in terms of supply, logistics, production, marketing, sales and IT, Burgazliev is convinced.
The French concern Renault has owned AvtoVAZ since 2009. Against the background of the 2008-2009 economic crisis and the decline in sales of technically outdated cars, the Togliatti auto giant found itself in a difficult financial situation. At the end of the 1st quarter of 2009, the company’s debt to subcontractors amounted to about 14 billion rubles. In the 9 months of 2009, automobile production decreased by 43.5% compared to the same period of the previous year.
The plant belonged to several commercial structures through a cross-plan, during a complex agreement involving Ruben Vardanyan’s Troika Dialog, the Renault concern became the new owner of AvtoVAZ. Rostec also bought a stake in the company, as the Russian government transferred 75 billion rubles to the plant through the state company. irrevocable subsidies.
Source: Gazeta
