26 Mar 2019 19:24

VEB discussing restructuring of Russian business with Ford, hoping to prepare deal by next supervisory board meeting

MOSCOW. March 26 (Interfax) - U.S. auto manufacturer Ford has approached VEB with a proposal on the restructuring of the company's business in Russia, and the parties are now discussing various options, head of the state lender Igor Shuvalov told reporters.

"We have proposals as a creditor, Ford approached us. This is an interesting proposal, and we are working on it now," Shuvalov said when asked whether Ford was considering closing its factories in Russia as part of a restructuring.

At the same time, Shuvalov said that he was unable to disclose details. "I can say that we are discussing serious options in a close dialogue with Ford and those who are Ford partners in Russia. I hope that by the next supervisory board meeting, we will have the significant contours of a deal and, perhaps, a fully formed deal," he said.

When asked about the volume of the joint venture between Ford and Sollers , Shuvalov said only that it "exists."

In 2011, VEB issued a loan for development of the JV in the amount of 36 billion rubles. In April 2015, it was reported that VEB extended the Ford Sollers JV a further loan of 13.5 billion rubles.

U.S. automaker Ford might completely abandon production and imports of cars in Russia as early as this summer, national daily Kommersant reported on Tuesday, citing sources in the Russian government and on the market.

The final plans for restructuring the Ford Sollers joint venture will become known on March 27. Ford will only have a presence in the light commercial vehicles (LCV) segment, retaining a stake in the plant in Yelabuga, which assembles the Ford Explorer SUV and Kuga crossover, the paper said. The sale of remaining assets is already being discussed at the government level.

But Ford might also completely pull out of Russia. In order to retain some sort of production, the company needs a special investment contract (SPIC), which Ford does not intend to sign, the paper said.