AvtoVaz could finish transaction with United Auto Group by year's end
MOSCOW. Feb 25 (Interfax) - OJSC AvtoVaz (AVAZ) hopes to acquire the controlling packet in OOO United Auto Group (a subsidiary of Sberbank Capital, manages IzhAvto automotive plant) in June and gain full control of the group by year's end, United Auto Group's head, Igor Kulgan, told journalists on the sidelines of the KomAvto 2011 Conference, which was organized by the Russian business daily Vedomosti on Friday.
"Control will be received by June. Everything will be done by year's end," he said when asked when AvtoVaz would finish its acquisition of United Auto Group from Sberbank Capital.
A source informed about the negotiation situation earlier told Interfax that the transaction will be finished in March.
It was earlier reported that Sberbank finally decided in mid-December on AvtoVaz over Hyundai-KIA as a potential partner for IzhAvto.
Sberbank, AvtoVaz and state corporation Russian Technologies (one of AvtoVaz's shareholders) signed a memorandum on December 17 for a project to develop and modernize IzhAvto over the long-term. "We intend to acquire 100% in United Auto Group over the next year with AvtoVaz's funds. The implementation of the joint venture between AvtoVaz and Renault-Nissan alliance for modernizing IzhAvto will help provide solutions to social problems in Udmurtia and create additional jobs," AvtoVaz president Igor Komarov said.
Around 116,000 cars could be assembled at IzhAvto in 2011. By 2014, production at the plant could increase to 300,000 cars a year, of which will be Renault and Nissan cars.
AvtoVaz could invest up to 7 billion rubles in IzhAvto for a period of three or four years. Sberbank will provide the Togliatti-based company 7 billion rubles for period of up to seven years for investment in IzhAvto.