MOSCOW, October 6 (RIA Novosti) - The French carmaker Renault, which holds a blocking interest in AvtoVAZ, is willing to invest in the ailing Russian auto giant, Russian First Deputy Prime Minister Igor Shuvalov said on Tuesday.
"Renault confirmed yesterday that it was prepared to invest in the development of AvtoVAZ, including the provision of the most advanced technologies. The volume of investment will be specified following discussion of the plans for AvtoVAZ's development and a corresponding valuation," Shuvalov said.
Shuvalov said the government has already allocated 25 billion rubles ($830 million) to help the auto giant, known for its Lada brand, repay its current liabilities, and is prepared to grant another 12 billion rubles ($400 million).
According to Shuvalov, Renault confirmed its willingness to provide all necessary data, expertise and personnel to help streamline work at AvtoVAZ.
"The main thing is that Renault has confirmed its strategic interest in the development of AvtoVAZ and believes that the acquisition of 25% plus one share was a strategically correct and justified decision," Shuvalov said.
Russian Prime Minister Vladimir Putin pledged on Monday to save AvtoVAZ from closure.
The company posted record losses of 14.2 billion rubles ($447 million) in January-June 2009 against net profits of 1.49 billion rubles ($47 million) in the same period of 2008.
As part of an anti-crisis program, AvtoVAZ is expected to reduce its workforce by up to 27,600 to some 75,000. The company's press service said in late September that 13,000 people of pensionable age, some 5,500 of preretirement employees and 9,100 active workers were facing redundancy. The company dominates the economy of the Volga city of Togliatti, employing a large percentage of the local working population.
An AvtoVAZ top manager told Russian business daily Kommersant last week that the stakes of Russian Technology Corporation and Troika Dialog, which hold 25% each, could be diluted and that both companies have no objections, while Renault could retain its blocking stake of 25%, if it pays for AvtoVAZ's new share issue with its license for Logan cars and production-line equipment.
Christian Esteve, a member of the Renault Management Committee, told Putin on Monday that his company wanted to remain a partner of AvtoVAZ.
AvtoVAZ has production capacity of over 800,000 vehicles annually. It has made more than 25 million Lada cars since it was established in 1970 as a joint project with Italian carmaker Fiat. The company currently produces 15 models priced between 150,000 rubles ($4,800) and 350,000 rubles ($11,240).