Russia Prime Minister Vladimir Putin has instructed the government to provide a 25bn rouble (US$806m) loan to support the ailing carmaker AvtoVAZ according to the government’s website.
The funds will be granted to the Russian Technology Corporation, a key shareholder in the Togliatti-based carmaker which in turn will grant an interest free loan to AvtoVAZ.
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The Russian manufacturer’s Chief Executive Officer Boris Alyoshin said the government money would be channeled primarily to bridging the company’s debts for earlier periods while AvtoVAZ’s investment programme will eventually be financed by banks on a market basis.
The company’s debt stood at 44bn roubles (US$1.3 bn) as of mid-April, a figure that includes bond issues. The company has had to suspend production over payment disputes with suppliers on a number of occasions this year.
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