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Renault will have to reimburse Russian investors $1.3 billion to buy back the share it sold for 1 ruble, AvtoVAZ CEO says
Renault will have to compensate Russian carmaker AVTOVAZ up to $1.3 billion if it wishes to re-acquire its former business and re-enter the market, having previously quit the country, CEO Maxim Sokolov said on Tuesday.
In 2022, AVTOVAZ purchased Renault’s share in the joint enterprise for a symbolic sum of 1 ruble with an option to return within six years.
Renault joined other foreign corporations that succumbed to international pressure and left Russia in the wake of the escalation of the Ukraine conflict in February 2022.
A return is only possible if the French automaker reimburses the investments made in its absence to develop the business, Sokolov told journalists, specifying that they would top 112 billion rubles ($1.3 billion) in 2023-2025.
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“They [the investments] exceed the average annual investment volumes that were made by the previous shareholder, Renault, in the early 2020s,” the top executive said.
“Therefore, it’s clear that these investments will need to be reimbursed upon return,” he added, stressing that the price of return wouldn’t equal the price of exit.
Renault sold its 100% stake in Renault Russia and its 68% stake in Russian carmaker AvtoVAZ in 2022. Renault’s assets were later transferred to Russian state ownership.
In November 2022, Russia launched production of an updated version of the iconic Soviet-era car brand Moskvich at Renault’s factory in Moscow, which used to produce cars under the Renault and Nissan brands.
The car giant reported a write-down of over $2 billion as a result of the withdrawal from its second-biggest market.
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