Rostec: AVTOVAZ needs additional measures of support

MOSCOW, 12 February. The largest Russian producer of cars “AVTOVAZ” needs additional measures of support. This was reported in the press service of “Rostec”.

AvtoVAZ needs additional support measures to improve the situation and continue the implementation of investment programs,” reports one of the largest shareholder of the automaker.

The Corporation is in discussion with Renault-Nissan recapitalization of AVTOVAZ by depositing additional funds in the capital and conversion of debt. “We are closely monitoring the situation and together with the shareholders of Alliance will take measures on financial recovery of “AVTOVAZ”.

As a possible scenario includes recapitalization by depositing additional funds in the company’s share capital and conversion of debt. While rostec intends to maintain its equity at 25%,” – said the Corporation.

Risks of the auto giant

As previously reported, the largest Russian producer of cars “AVTOVAZ” has the risk of delay operating activities due to large losses and complexities associated with the repayment of debt. This was confirmed by an independent auditor.

Auditor (Ernst&Young) notes that the loss of “AVTOVAZ” in size 73,85 billion by the end of 2015, as well as short-term liabilities exceeded the year-end current assets to 67,78 billion rubles, which causes the auditor doubts ability of AVTOVAZ to continue operating as a going concern.

Renault announced that it was considering the possibility of recapitalization of AVTOVAZ.

The largest shareholders of AVTOVAZ – Renault-Nissan Alliance and state Corporation “rostec”, which is in control of the company via a joint Dutch company Alliance Rostec Auto B. V.. this company Alliance controls the controlling package of “AVTOVAZ” and “rosteh” – a blocking stake.