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September 28, 2009

RUSSIA: AvtoVAZ seeks large restructuring loan

AvtoVAZ is reportedly seeking a new loan worth 12 billion roubles (USD400m) in order to compensate workers it has let go.

AvtoVAZ is reportedly seeking a new loan worth 12 billion roubles (USD400m) in order to compensate workers it has let go.

The Russian Interfax news agency said the loan will be interest-free until 2015, Interfax said, citing a package of measures proposed by the company to the government’s anti-crisis commission.

The report did not say where AvtoVAZ hoped to obtain the loans.

Some reports say new loan finance could come from the Russian government.

AvtoVAZ which is 25% owned by Renault , will cut up to 27,600 jobs, close to a third of its workforce, to help it reach “effective and profitable production.”

The company employs 102,000 and made the announcement as separate data revealed that car output in Russia fell 62.6% year-on-year to 369,000 units between January and August.

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