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Friday, October 07, 2022

Renault silent after media reports of Avtovaz stake transfer

April 26 (Reuters) – Renault (RENA.PA) declined to comment on a report by Russian news agency Interfax on Wednesday that it would buy its majority stake in carmaker AvtoVAZ (AVAZI_p.MM) for a symbolic ruble of Russian Science. transferred to the Institute.

Shares of Renault (RENA.PA) fell more than 1% after reports about Avtovaz, which owns the Lada brand and is Russia’s largest national automaker.

Interfax, citing Russian Trade Minister Denis Manturov, reported that Renault would have the right to buy back its 68% stake in AvtoVAZ within the next five to six years.

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Manturov also said that Renault’s stake in the Moscow plant would be given to the city government, potentially offering the first example of what Russian authorities intend to do with Western assets.

The French state, which holds a 15% stake in Renault, also declined to comment on the report.

Shares of Renault were down 1.6% at 21.77 euros as of 0715 GMT.

Renault, the western carmaker most exposed to the Russian market, said last month it would suspend operations at the plant amid mounting pressure on its continued presence since the start of the conflict in Ukraine. read more

Last month, Renault said it was considering a 2.2 billion euros ($2.3 billion) non-cash writedown to reflect the potential cost of suspending its operations in Russia. read more

Manturov said Renault had decided to transfer the Avtovaz stake to the Moscow-based NAMI Automobile and Engine Research Institute because it lacked the ability to continue its Russian operations.

The deal would be worth a ruble, he said, giving Renault the option to buy back the stake.

“But if during this period we invest, then when it comes to cost it will be taken into account. There will be no gifts here,” Interfax quoted Manturov as saying.

Commenting on the Interfax report, analysts at Credit Suisse wrote: “Slightly positive as it brings the issue closer to resolution, keeping the door open for a comeback, although there are clearly many unknowns as to when/if Russia’s vehicles are coming.” The rebellion in the market and the geopolitical climate calms down.”

More than 400 companies have withdrawn from Russia since the invasion of Ukraine on February 24, leaving behind billions of dollars in assets.

Russia called its actions in Ukraine a “special operation” to disarm Ukraine and protect it from fascists. Ukraine and the West maintain that the fascist allegations are baseless and that the war is unprovoked aggression.

($1 = 0.9404 Euro)

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Reporting by David Ljunggren; Additional reporting by Dominic Vidalon and Tasillo Hummel; Editing by Richard Pullin, Stephen Coates and David Clark

Our Standards: Thomson Reuters Trust Principles.

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