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Renault Dumping Its 68% Stake in Russia’s Biggest Carmaker for One Rouble

It’s been reported that Renault will transfer its 68% stake in Russia’s biggest carmaker AvtoVAZ to an automotive research institute (NAMI) for one Rouble, according to the Russian trade ministry, which also claims that Renault’s factory in Moscow, which builds both Renault-branded cars as well as Nissans, would end up in the hands of the city.
Renault are reportedly dumping their stake in AvtoVAZ 6 photos
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The trade ministry said that Renault would retain the right to buy back its AvtoVAZ stake from NAMI within five to six years. NAMI is where Russia’s cars and trucks are developed, including the limousines used by President Vladimir Putin.

AvtoVAZ is, of course, owned by Lada Auto Holding, which in turn means that Renault is basically giving up on Lada, at least for the time being.

Neither the French carmaker nor the French government, which owns a 15% stake in Renault, have yet to comment on this deal, which was originally reported by Russian news agencies, citing Trade Minister Denis Manturov.

Renault already came out and said that it would suspend operations at its Moscow plant and that it was considering a 2.2 billion euro ($2.3 billion) non-cash asset devaluation to reflect what this suspension could potentially cost them.

“Modest positive as this brings the issue closer to resolution, keeps the door open to return, though clearly many unknowns on when/if Russia vehicle market rebounds and geopolitical climate cools,” said a Credit Suisse analyst, as quoted by Reuters.

The trade ministry went on to state that Renault’s sole reason for dumping its stake in Lada-maker AvtoVAZ was because the former could no longer maintain their Russian operations.

“But if during this period we make investments, then that will be taken into account when it comes to the cost. There won’t be any presents here,” said Manturov, while referring to Renault maintaining its option to buy the stake back.

Since the Kremlin began its invasion of Ukraine on February 24, more than 750 companies have reportedly halted operations in Russia, either temporarily or by pulling out completely.

 
 
 
 
 

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