Renault divests stake in Avtovaz for one ruble

The Renault plant in Moscow is handed over to the Moscow city government. The French automaker has the option to buy back Lada maker Avtovaz within five or six years.

French carmaker Renault will sell its 68 percent stake in Russia’s largest automaker Avtovaz to the scientific institute NAMI for a symbolic price of one ruble. The Russian Trade Ministry also announced on Wednesday that the Renault plant in Moscow, which produces Renault and Nissan cars, will be handed over to the city government.

However, Renault has the opportunity to buy back the Lada manufacturer Avtovaz within five or six years, the ministry admitted. “But if we make investments during this period, then the price will take them into account. There will be no gifts there,” quoted the Interfax news agency as Trade Minister Denis Manturov.

The French carmaker and the French government, which owns a 15 percent stake in Renault, declined to comment. Russian news agencies reported on the planned transaction for the first time, citing Trade Minister Manturov.

“This is cautiously positive as it brings the problem closer to resolution and leaves the door open for a return, although there are really many unknowns as to when/if the Russian vehicle market will recover,” commented Credit Suisse analysts.

After Europe, Russia is the second largest market for the Renault group, which, according to Citibank estimates, generates eight percent of its profits in the country. The group stopped operations at its Russian plant last month and announced that it was reviewing options for Avtovaz. The year’s target was evaporated.

Weeks ago, Moscow warned that if Western companies withdrew from Russia, they would be expropriated and their patents confiscated.

Moscow’s invasion of Ukraine on February 24 triggered a mass withdrawal of western companies from Russia. More than 750 companies have announced that they will at least partially restrict operations there, according to the Yale School of Management.

(APA/Reuters)

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