Renault President Carlos Ghosn, left, and AvtoVAZ CEO Sergei Chemezov, attend the ceremony of signing the Memorandum of Understanding, Tolyatti, December 9, 2007.
Photo: Evgeny Gladkov
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Renault, AvtoVAZ to Ink Buying Contract Feb
The agreement that French Renault and Troika Capital Partners (that stands for investors’ pool, including Rosoboronexport) sealed for buying out 25 percent in AvtoVAZ isn’t binding, Vedomosti reported Tuesday.
Renault is carrying out the due diligence in AvtoVAZ and the parties may enter into the final agreement by February 26, 2008. After it, Renault will own 12.8 percent in Russia's carmaker, and the stake will widen to 25 percent plus a stock once the stocks of AvtoVAZ subsidiaries are paid off and the works releases new stocks.
The deal’s budget hasn’t been disclosed so far. Chief of Rostekhnologii and AvtoVAZ CEO Sergei Chemezov said it nears the market price. According to sources close to Troika and AvtoVAZ, the amount has been calculated based on the AvtoVAZ evaluation of $5.3 billion. So, the blocking stake could cost roughly $1.325 million.
Troika will get only a half of the amount (about $660 million) after the contract is inked in February, said the sources close to Rosoboronexport, Troika and AvtoVAZ management. Renault will transfer another 20 percent (over $260 million) after its ownership extends to the blocking one in July, i.e. the investors will derive about $920 million at this stage of the deal.
The vendors will get the remaining 30 percent only in 2010. Its amount will depend on AvtoVAZ achievements. The size of the last payment will be calculated in view of the average EBITDA posted by 2008-2009 results, said a source close to Troika.
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