Renault plans to buy a 25% plus one share in the plant based in the southern city of Togliatti, and could sign a final deal on February 25, when the auto giant will pick up a 12.8% stake in AvtoVAZ. The remaining shares could be acquired in July, Vedomosti said.
The value of the deal has not been disclosed so far. But Sergei Chemezov, head of the Russian Technology state-run corporation, which comprises AvtoVAZ, said the stake would be sold at a price close to its market value, the paper said.
Sources close to Troika Capital Partners, a subsidiary of the Troika Dialog brokerage, and AvtoVAZ said the plant is estimated at $5.3 billion, and a blocking stake could be worth around $1.3 billion, Vedomosti reported.
If the contract is signed in February, Troika, which acts for a group of investors including Rosoboronexport, would receive half of the sale price, according to sources in the state-run arms exporter, the brokerage and the car plant quoted by the daily.
Renault will pay another 20% of the deal price after acquiring the stake in full in July, according to the paper. The sellers will receive the other 30% installment by 2010, and the amount will depend on AvtoVAZ's performance.
A Troika source said the final installment sum will depend on the plant's average EBITDA in 2008-2009, Vedomosti said.
In 2006, the carmaker received 2.5 billion rubles ($100 million) in net profit, almost 80% up on 2005. Revenue in 2006 gained 15% on 2005 to reach 152.4 billion rubles ($6.1 billion). In 2007, the company expects to earn a total of 166 billion rubles ($6.6 billion).
Renault already owns 25% in AvtoVAZ, and will control the stake de facto after February 25. Russian Technology will have a 50% blocking stake in the Russian carmaker regardless, Chemezov said earlier.
Renault launched production of the inexpensive Renault Logan model in Russia in late 2005 at the Moscow-based Avtoframos plant, in which the Moscow city government has a stake. The French carmaker invested $250 million in the project.
