French car maker Renault has spent years investing in the Russian market. To do so, the Alliance which has with Nissan have been taking little by little the local manufacturer AvtoVAZ’s control. The Russian firm, since he was the iron curtain and the automotive industry became more global no has been able to walk by herself.
Thanks to this made, the Alliance Renault-Nissan has been able to increase its sales to good rhythm in the difficult market Russian. However, Renault has decided that bet even more by Russia and has accepted recapitalize to AvtoVAZ in Exchange for increase its control on it in more than one 70 percent of its shareholders.
The capital increase is encrypted in some 1,200 million euros. However this operation will take place through a double mechanism. On the one hand Renault will provide 350 million of euros as first payment to expand this capital. Moreover, in a second performance, increase their shares in the company in Exchange for assume a part of the debts that has this with partners capitalist.
After the process of enlargement of capital, AvtoVAZ will be commanded by Renault in a 72.5 per cent, by Nissan at 5.5 percent, by Mexico on 11 per cent and the rest by private investors. However, the remote control will be assumed entirely by the French manufacturer.
After the Renault-Nissan alliance agreement is closed will be one of the companies that more weight will be within the Russian automobile industry. If the franco-Japanese conglomerate knows how to play his cards with cunning and knows well weather the bad situation that go through the sales of new cars in the country, you can become a serious rival to the consolidated firms.
Source – AvtoVAZ