Under pressure carmaker IzhAvto is reportedly negotiating the restructuring of its debts with key creditors.
The firm has also pledged to start production of new car models this year, business daily Vedomosti has reported.
IzhAvto, which defaulted on a 2 billion ruble bond issue in December, is negotiating with bond holders on the restructuring of its debts, said Dmitry Rumyantsev, a representative of SOK Group, which owns about 98% in IzhAvto.
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The car producer has been severely affected by the economic crisis; its monthly revenue plummeted tenfold in November-December and banks have reduced the company’s credit limits, Vedomosti said, citing the company’s investment memorandum.
IzhAvto has promised its creditors that the situation at the plant will improve after it is purchased by the country’s largest car producer AvtoVAZ, according to the memorandum.
IzhAvto’s management expects the deal to be closed in February.
AvtoVAZ plans to start production of Renault-Nissan cars at IzhAvto, the daily reported, citing IzhAvto managers.
IzhAvto is expected to produce 28,000 Renault cars in 2009 and 230,000 Renault cars in 2013, according to the memorandum.
It is also expected to produce 55,000 Nissan cars in 2011 and 135,000 Nissan cars in 2013. AvtoVAZ and its partners will have to invest about 32 billion rubles in the upgrade of IzhAvto in order to meet these output targets, the daily reported.
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