Renault-Nissan Alliance and Russian Technologies Agree to Create Joint Venture to Acquire a Majority Stake in AVTOVAZ

AsiaNet 49223

PARIS, May 3 /PRN=KYODO JBN/ --

- Renault-Nissan and state corporation Russian Technologies will form joint

venture to accelerate product launches and technology transfer to AVTOVAZ,

Russia's largest carmaker.

- Renault-Nissan will invest about US$750 million, and Russian Technologies

will favorably restructure debt as they form the joint venture.

Renault-Nissan will get a majority stake in the joint venture, which will

control AVTOVAZ; transaction is expected to be complete in 2014.

- The Renault-Nissan Alliance and state corporation Russian Technologies have

agreed to create a joint venture and give the Renault-Nissan Alliance an

indirect majority stake in AVTOVAZ, according to a new memorandum of

understanding.

     (Photo: http://photos.prnewswire.com/prnh/20120503/530914 )

The Renault-Nissan Alliance, AVTOVAZ, Russian Technologies and Troika Dialog

signed the non-binding agreement today in Paris. According to the memorandum,

the Renault-Nissan Alliance and Russian Technologies will contribute their

respective stakes in AVTOVAZ to a joint venture that will control AVTOVAZ,

Russia's largest car company and maker of the iconic Lada brand.

Renault-Nissan plans to invest about US$750 million, which will give the

French-Japanese car group 67.13% of the joint venture in mid-2014. The joint

venture will then hold 74.5% of AVTOVAZ. The transaction is expected to be

complete by 2014.

Renault, which purchased 25% of AVTOVAZ in 2008 and then helped AVTOVAZ pilot

an aggressive turnaround, will invest about US$300 million in the joint

venture. Nissan, which does not currently own a stake in AVTOVAZ, will invest

about US$450 million. Renault and Nissan will make periodic payments through

2014.

Russian Technologies has agreed to restructure its outstanding loans with

AVTOVAZ with approximately RUB7 billion (US$238 million) proceeds from the

anticipated sale of AVTOVAZ's non-core assets being used to repay part of

Russian Technologies' loans. The remainder of circa RUB46 billion (US$1.56

billion) of interest-free debt is being extended well beyond its current

maturity date. This gives AVTOVAZ a strong balance sheet with no liquidity

constraints.

For the full release, go to:

http://blog.alliance-renault-nissan.com/sites/default/files/201205_The_Alliance_Press_Release.pdf

Source: Renault-Nissan