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Renault To Sell Its Multi-billion Dollar Russia Business For One Ruble, Russia Says
Renault to sell its multi-billion dollar stake in Lada maker, Avtovaz, says, Minister of Trade and Industry.
But the French car manufacturer will have the opportunity to buy back the shares within five to six years.
Renault announced the suspension of activities in Russia in March, following its invasion of Ukraine on Feb. 24.
Renault has declined to comment on a report that it plans to transfer its 68 percent stake in Russia’s biggest carmaker, AvtoVAZ, to the Research Automobile and Motor Engine Institute (NAMI) for one rouble.
Minister of Trade and Industry Denis Manturov said Renault had decided to transfer the AvtoVAZ stake to NAMI because it lacked the ability to keep its Russian operations going.
“Of those who are in discussion with us about their departure, for now it is Renault. Renault, indeed, due to a shortage of funds to maintain the performance or activities of its divisions in Russia, decides to transfer the shares of AvtoVAV” .
Manturov also revealed that Renault will have the opportunity to buy back the shares within five to six years, adding that buying or nationalizing Western companies is not part Russia’s plans.
“Buying or, moreover, nationalizing is not part of our plans. But if the company does not have the ability to ensure the supply of components today, we cannot wait forever. We will be forced to find an alternative,”
But the head of the department noted “there will be no gifts here”, as the value of the shares may change if Russia makes investments during this time.
The Minister of Trade and Industry also said Renault’s factory in Moscow, which produces cars under the Renault and Nissan brands, would be passed to the city’s government.
Renault had on March 23 announced the suspension of production activities in Russia. It added that it was considering a 2.2 billion euro ($2.3 billion) non-cash writedown to reflect the potential costs of the suspension.
The French automaker follows more than 400 companies that have withdrawn from Russia, following its invasion of Ukraine on Feb. 24, leaving behind assets worth billions of dollars.
