Renault sells Russia’s Avtovaz stake, but leaves room for return

Could 16 (Reuters) – Renault (RENA.PA) is to promote its majority stake in carmaker Avtovaz (AVAZI_p.MM) to a Russian science institute reportedly for only one rouble with a six-year possibility to purchase it again, leaving the door open for the French carmaker’s return.

Moscow Mayor Sergei Sobyanin stated that so as to protect hundreds of jobs, Renault’s plant within the metropolis could be used to restart manufacturing of the Soviet-era Moskvich model.

Renault, the Western carmaker most uncovered to the Russian market, stated on Monday that its holding of practically 67.69% in Avtovaz could be offered to the Russian Central Analysis and Growth Vehicle and Engine Institute, referred to as Nami.

“The closing of those transactions will not be topic to any situations, and all required approvals have been obtained,” it added.

Two sources acquainted with the scenario instructed Reuters that Renault Russia and the Avtovaz stake have been offered for a symbolic one rouble ($0.016) every. The corporate’s 100% stake in Renault Russia will go to town of Moscow.

Renault had valued its Russian belongings at 2.2 billion euros ($2.29 billion) final 12 months.

“At this time, we now have taken a tough however obligatory resolution, and we’re making a accountable alternative in direction of our 45,000 workers in Russia,” the carmaker’s CEO, Luca de Meo, stated.

The transfer preserved the group’s efficiency and its skill to return to the nation sooner or later in a unique context, he added.

The Avtovaz manufacturing facility at Togliatti may additionally make Renault Duster automobiles beneath the Lada model, Denis Pak, head of the automotive business division on the Business and Commerce Ministry, stated in a televised interview with Rossiya-24.

He stated an settlement was reached with Renault.

Renault was not instantly accessible to remark.

De Meo has been clear in regards to the French carmaker’s need to return to Russia after the warfare in Ukraine is resolved and regular relations are finally restored.

The enduring Moskvich, which interprets as a local of Moscow, ceased manufacturing round twenty years in the past.

However Sobyanin, the mayor, stated Moscow was working with truck maker Kamaz Inc (KMAZ.MM) and Russia’s Business and Commerce Ministry to localise as a lot automobile element manufacturing in Russia as doable. learn extra

Pak stated Moskvich manufacturing was anticipated to start out this 12 months. The Moscow plant might be renamed Moscow Vehicle Manufacturing unit Moskvich, he stated.

Renault stated in March that it will droop operations on the Moscow plant amid mounting strain over its continued presence there because the begin of the battle in Ukraine. learn extra

Renault, which is 15% owned by the French state, confirmed a non-cash writedown of practically 2.2 billion to mirror the potential prices of suspending Russian operations. learn extra

Greater than 400 corporations have withdrawn from Russia because it invaded Ukraine on Feb. 24, abandoning belongings value billions of {dollars}.

Russia calls its actions a “particular operation” to disarm Ukraine and defend it from fascists. Ukraine and the West say the fascist accusation is baseless and the warfare is an unprovoked act of aggression.

($1 = 63.8370 roubles)

($1 = 0.9593 euros)

Reporting by Benoit Van Overstraeten, Gilles Guillaume and Nick Carey; enhancing by Clarence Fernandez, Jason Neely, Kirsten Donovan and Leslie Adler

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