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September 29, 2009

RUSSIA: IzhAvto looks to state conglomerate for help

Russian carmaker IzhAvto is in talks with state-owned Rostekhnologii on becoming part of the industrial conglomerate’s Rosavto automobile holding, according to business daily Vedomosti.

Russian carmaker IzhAvto is in talks with state-owned Rostekhnologii on becoming part of the industrial conglomerate’s Rosavto automobile holding, according to business daily Vedomosti.

The newspaper cited Oleg Radionov, industry minister of the constituent republic of Udmurtia where IzhAvto is based. Rostekhnologii plans to transfer its auto assets, including 25% in the country’s largest carmaker AvtoVAZ, and 37.8% in truck maker Kamaz, into Rosavto.

Vedomsti said that no precise agreements have been reached. IzhAvto has only submitted its suggestions to Rostekhnologii, a source at the carmaker said. IzhAvto would like Rostekhnologii to help it settle its debts, which totalled RUR14.7bn (US$490m) as of the end of June. Earlier this month, IzhAvto was declared bankrupt.

Rostekhnologii would gain control over IzhAvto if it included the automaker in its new holding, the daily said. It added that IzhAvto had earlier sought a partnership with Rostekhnologii, quoting Sergei Chemezov, head of the conglomerate, as saying earlier this year that the corporation was not interested in the carmaker. The company’s position has not changed since then, a source at Rostekhnologii told the daily.

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