Renault is forced to sell its shares in AvtoVAZ for 1 ruble
The consequences of the war in Ukraine are numerous for the automotive world. Supply issues, sales disruptions and suspended factories are just a few examples. The French manufacturer Renault has just suffered a terrible industrial and financial setback that has caused it to lose tens of billions of dollars, all for 1 rouble.
The story is simple, the Russian government forces the Renault manufacturer to sell its shares in AvtoVAZ, the producer of Lada, for a symbolic sum of 1 ruble ($0.017). The lucky buyer is the Centrale scientifique en recherche automobile et institut en mechanic automobile, better known as NAMI.
This division of the Russian government gets its hands on the shares of Renault, which total some 68% of the shares of AvtoVAZ. In a way, AvtoVAZ has just been nationalized by the Putin government.
Although it is difficult to know the exact value of the loss, in 2008 Renault bought 25% of the shares of AvtoVAZ for the sum of one billion US dollars. We know that Renault had been looking for a potential buyer for several weeks already in order to avoid what just happened.
In addition to the loss of its shares, Renault will lose its manufacturing facilities where Renault and Nissan products were produced in the Moscow region. Here again, we are talking about several hundred million dollars in losses.
Reuters reports that Russian Trade Minister Denis Manturov, however, maintains that Renault will have the opportunity to resume shares within 5 or 6 years. However, he continues: “If, during this period, we make investments, we will have to take this into account when it comes to prices. We will not give gifts. We can therefore assume that the Russian government has the firm intention of outbidding the value of the company in the event that Renault has the will to take back its shares in AvtoVAZ.
NAMI is an institution whose foundation dates back to 1920. Since its very beginnings, it has evolved in the automotive world. The organization gained particular prominence outside Russia’s borders with the unveiling of the Aurus Senat presidential limousine designed for the current President of Russia, Vladimir Putin.
