Mexican Media Brands
Renault Plans €1.2 Billion Bailout for AvtoVAZ
Renault SA plans to fund most or all of an 85 billion-ruble (€1.2 billion) recapitalization of Russian Lada maker OAO AvtoVAZ, Reuters reports.
#economics
Share
Renault SA plans to fund most or all of an 85 billion-ruble (€1.2 billion) recapitalization of Russian Lada maker OAO AvtoVAZ, Reuters reports.
The sale, about 30% of which is expected to occur as a rights issue to Renault shareholders on Monday, would raise Renault’s 8-year-old stake to 72.5% and enable the French company to consolidate AvtoVAZ as a subsidiary.
Reuters says Renault alliance partner Nissan Motor Co., which currently owns 12.5% of AvtoVAZ, is not expected to take part in the recapitalization. When the capital infusion is complete, Nissan’s stake will shrink to 5.5%.
The investment reflects Renault’s conviction that Russia’s collapsing auto market will begin to recover in 2018. Car sales in the country peaked at 3 million units in 2012. Volume, which fell to 1.6 million n 2015, and is expected to drop about 12% this year and remain flat in 2017.
RELATED CONTENT
-
VW Warns of Higher Costs to Develop EVs
CEO Herbert Diess says the €20 billion ($23 billion) Volkswagen AG has budgeted to electrify its entire vehicle lineup won’t be enough to meet that goal.
-
Ford’s $42 Billion Cash Cow
F-Series pickups generate about 30% of the carmaker’s revenue. The tally is about twice as much as what McDonald’s pulls in.
-
Inside Ford
On this edition of “Autoline After Hours” Joann Muller, Detroit bureau chief for Forbes, provides insights into what she’s learned about Ford, insights that are amplified on the show by our other panelists, Stephanie Brinley, principal analyst at IHS Markit who specializes in the auto industry, and Todd Lassa, Detroit Bureau Chief for Automobile.