PARIS, November 4 (RIA Novosti) -- French group Renault welcomed on Wednesday the Russian government's latest plan to bail out the ailing AvtoVAZ automaker.
Prime Minister Vladimir Putin said on Tuesday the Russian government is planning to raise 54.8 billion rubles ($1.87 billion) in a rescue package for Russia's largest carmaker.
A spokeswoman for Renault, which holds a 25% stake in AvtoVAZ, said the company "completely backs the restructuring."
"AvtoVAZ and the Russian government can count on our support insofar as concerns technology, equipment, the production platform and expertise to enable AvtoVAZ to consolidate its hold in the auto industry," she said.
A Russian government source told Reuters on Wednesday the Russian government could allow Renault to buy control of AvtoVAZ.
"At the end of the day, the government will search for a strategic investor - and it will likely be Renault," said the government source. "They [Renault] are ready to increase their stake and are looking at the option of increasing to a controlling stake."
However, a Russian government spokesman said he was not aware of any plans to increase Renault's stake.
"I don't know anything about the matter being raised as a government source is saying," Dmitry Peskov said, referring to Reuters' report.
Chief operating officer Patrick Pelata said Monday Renault had refused Russian demands for a big cash infusion.
"They would love us to pour in lots of money because AvtoVAZ needs money, but we don't have a lot of money," Pelata was quoted as saying. "We told them we cannot put more money in the joint venture."
Putin said priority would be given to dealing with the company's "bad debts" - around 38 billion rubles ($1.3 billion) plus another 12 billion rubles ($410 million) for modernization and the development of "competitive" new models.
He said about 4.8 billion rubles would be needed for a job creation program. "In total 54.8 billion rubles," the prime minister said.
He did not explain exactly how the funds would be raised, but said he was counting on "understanding from the creditors."
AvtoVAZ Executive Vice President Oleg Lobanov said on October 19 that as of October 1, 2009, AvtoVAZ's principal debt stood at 62 billion rubles ($2.1 billion), including a 25 billion-ruble ($850 million) loan granted to the carmaker via state corporation Russian Technology, the holder of a blocking stake in the auto giant.
The automaker previously said it may have to file for bankruptcy due to losses and spiraling debts, but that production would not be halted.
The company, known for its Lada brand, is expected to run up 75.2 billion rubles ($2.6 billion) in debt by the end of 2009.
AvtoVAZ, which dominates the economy of the Volga city of Togliatti, earlier announced plans to cut its 100,000-strong workforce by over 25%.
