“Today’s agreement is a win-win-win for all companies: Renault, Nissan and AvtoVAZ,” said Renault-Nissan CEO, Carlos Ghosn. “It is a significant new chapter in an already solid partnership.
“The joint venture will help accelerate our Russian market offensive. It will support the competitiveness of AvtoVAZ, Russia’s auto industry leader.”
Renault, which purchased 25% of AvtoVAZ in 2008, will invest around US$366m in the joint venture and plans to own 50.1% in it by June, 2014. Nissan which did not previously own a stake in AvtoVAZ, will invest US$376m and plans to own 17.03% in the joint venture by the same time.
During the same period, Russian Technologies will hold 32.87% of the joint venture.
As part of the deal, Russian Technologies is restructuring its outstanding loans with AvtoVAZ with US$258m in proceeds from the anticipated sale of AvtoVAZ’s non-core assets being used to repay part of Russian Technologies’ loans.
The remainder of around US$1.48bn of interest-free debt is being extended until 2032, giving AvtoVAZ a balance sheet with no liquidity constraints.
The transaction is subject to applicable conditions.