French car manufacturer Renault has bought 9.15% of AVTOVAZ shares from Japanese auto maker Nissan in the joint venture of Alliance Rostec Auto B.V. (controls 64.6% of PJSC AVTOVAZ shares). The deal has amounted to €45 million. Renault held 73.3% shares of Alliance Rostec Auto B.V. at the end of 2016, the state corporation Rostec 17.55% and Nissan International Holding B.V. 9.15%. Thereby, Nissan has withdrawn from its shareholder position in AVTOVAZ, as written in Kommersant newspaper.
As stated by Renault, this transaction will not have an effect on the current projects carried out by the Renault-Nissan Alliance. The company has not disclosed how the transaction will affect the activities of AVTOVAZ, however, stated that the step is logical, as part of the recapitalisation process of AVTOVAZ. In this context, Renault Group will represent the interests of the alliance in Alliance Rostec Auto B.V. hereafter.
When the loss of the company tripled in 2015, reaching 73.85 billion rubles, AVTOVAZ has applied to its shareholders for help. Currently, AVTOVAZ is in the process of financial recovery, through an additional issue of shares. During the first issue of the additional share, the joint venture of Rostec and Renault-Nissan Alliance have acquired 1.65 billion shares of additional issue for 14.85 billion rubles and Cyprus Renaissance 1.25 billion shares for 11.25 billion rubles.
Sources in the automotive industry are of different opinions, as to why Nissan has left the AVTOVAZ shareholders on the eve of recovery. Some of the sources believe that Nissan was disappointed in the chronically unprofitable assets and also perceive the deal as a reaction to Nissan’s relationship with Renault in other markets.