AvtoVAZ hopes to receive some 26 billion roubles (USD680m) from the Russian federal government soon in order to ease a liquidity crisis that has disrupted production.
Business daily Vedomosti reported Monday that AvtoVAZ company President Boris Alyoshin has told suppliers that the firm has insufficient funds to pay them.
The report said the carmaker’s payables amount to 36 billion roubles and the firm has already used 45 billion rubles, or 60% of its assets, as collateral for loans and has no opportunities for borrowing more.
The carmaker’s main lenders include state-controlled banks Sberbank and VTB Bank, a source close to one of AvtoVAZ’ shareholders told the daily.
AvtoVAZ has switched to paying for 70% of component supplies with bills of exchange in recent months and had to suspend production several times due to lack of components after suppliers declined to accept bills of exchange.
AvtoVAZ has already applied for government support, but has not received any funds so far, Alyoshin said.
A cabinet meeting of the Russian government is expected to consider support to AvtoVAZ on Tuesday of this week, according to Prime-Tass.