OAO AvtoVAZ, Russia’s largest carmaker, said seeking protection from creditors is an option it may consider as the Russian government asks for help from partner Renault SA amid plunging auto sales.
The Russian government has given AvtoVAZ 25 billion rubles ($853 million) in emergency loans, while the carmaker has slashed salaries and announced plans to eliminate 21,773 jobs. AvtoVAZ will owe 76.3 billion rubles to financial backers and 9.8 billion rubles to suppliers by the end of the year, the Industry Ministry said last week.
“Seeking protection from creditors is one of the options that our company is considering,” Alexander Shmygov, an AvtoVAZ spokesman, said in a telephone interview today.
Renault, the second-biggest French carmaker, paid $1 billion for 25 percent of AvtoVAZ in 2007 and is discussing its role in a recovery plan with other shareholders including the Russian government. Prime Minister Vladimir Putin said earlier this month Renault would have to invest more cash or see its stake diluted.
Carlos Ghosn, chief executive officer of both Renault and Nissan Motor Co., said he’s prepared to support AvtoVAZ.
It’s “very difficult not being in trouble,” Ghosn told reporters in Tokyo today. “We understand that. We are here to support AvtoVAZ.”