Renault 'Ready to Support' Troubled Avtovaz

Will support company with management skills and technology

Renault, which has a 25% stake in Avtovaz, is ready to help the troubled Russian car company, according to Renault's CEO Carlos Ghosn. "Avtovaz is mainly producing and selling in Russia, and when your market goes down 55%, it is very difficult not to be in trouble, and we understand that," he said.

"We are ready to support Avtovaz," added Ghosn, who also heads Renault's Japanese partner Nissan Motor Co. "We are supporting them with our management skills, with technology. We are confident that Avtovaz will be able to overcome the challenges."

Renault bought 25% of Avtovaz in February 2008 for a billion dollars. Demand has since slumped dramatically for cars in Russia as consumers there cut back during the economic crisis

Russian Prime Minister Vladimir Putin earlier this month demanded that Renault help Avtovaz, which is in serious financial trouble due to the collapse in demand for cars and competition from foreign car makers.

Avtovaz, which employs more than 100,000 people, could file for bankruptcy if it is unable to restructure its debt, a top executive said on Oct. 19.

"Avtovaz is looking at several schemes to restructure its debt, the simplest option being protection from creditors. This is a rather realistic option," chief financial officer Oleg Lobanov said, RIA Novosti news agency reported.

Copyright Agence France-Presse, 2009

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish