10 Sep 2010 13:32

AvtoVAZ shareholders okay additional share issue

MOSCOW. Sept 10 (Interfax) - Shareholders in Russia's largest automaker AvtoVAZ voted at an extraordinary meeting Thursday in favor of increasing company charter capital with an issue of additional shares in closed subscription among Renault, the state corporation Rostechnologies, and Troika Dialog .

The shareholders also agreed to a EUR 400-million project with Renault-Nissan involving the building of automobiles on the B0 platform.

Materials for the meeting say that the plan for the additional issue - consisting of 435,173,411 ordinary shares with par value of 5 rubles apiece - is that it will be placed at 40.24 rubles per share.

At the close of MICEX trading Thursday, the average weighted price for an AvtoVAZ ordinary share was 26.127 rubles, meaning the additional-share placement price could be 54% higher than market.

Rostechnologies would get up to 314,775,721 shares, Renault up to 108,543,355 of them.

Phase one of the additional issue would therefore be 17,471,138,058 rubles, with Renault acquiring its shares for almost 4.368 rubles.

The price tag on the general framework agreement on the B0-platform project ("Master Framework Agreement Relating to B0 Platform Project") will be EUR 400 million. The agreement is valid for 25 years.

The substance of the agreement involves financing a project for the production and assembly at AvtoVAZ production facilities allocated to the project of powertrains, chassis, and automobiles on the B0 platform, as well as their acquisition by Renault and Nissan from AvtoVAZ, and each party's obligations as to product quality.

The shareholders also approved an agreement insuring the responsibilities of the board of directors, executive board, and company president. In all, the plan is to insure the actions of 24 AvtoVAZ representatives to the overall tune of $10 million with Independent Insurance Group. The premium would be $38,000.

The board of directors decided the meeting was to be held at a meeting of their own on July 28. The list of shareholders eligible to take part was set as of July 30.

Last next year, or in early 2012, AvtoVAZ plans to start producing five models on the B0 platform - two of them Ladas, two Renaults, and one Nissan - on a new assembly line with production capacity of 360,000 vehicles per year. The B0 platform is a universal platform for both Renault and Nissan, upon which class-B vehicles are built.

In 2020, AvtoVAZ plans to put out nine models on three or four platforms in six segments. Three will be budget vehicles, a budget car - the new Priora and S-class - and these will account for 70% of production

Rostechnologies, Troika Dialog, and Renault each hold 25% plus one share in AvtoVAZ.