11 Dec 2009 10:46

Aid for Avtovaz should be contingent on modernization, Renault contribution

MOSCOW. Dec 11 (Interfax) - The government has given final approval to 12 billion rubles in state support for Russian car maker Avtovaz , Prime Minister Vladimir Putin said at a government meeting on Thursday.

Release of the remaining 38 billion rubles of the 50 billion rubles in total support announced earlier should be tied to the technological modernization process and to Renault-Nissan's contribution to Avtovaz, First Deputy Prime Minister Igor Shuvalov said.

The 12 billion rubles will be provided to Avtovaz in the form of an interest-free loan from parent company Rostekhnologii. Avtovaz will use the money to settle with parts suppliers and with state-owned creditors, Shuvalov said. The 12 billion rubles will boost Avtovaz charter capital and "the other shareholders must participate in that process with technology or money," he said.

The program for development of the automotive industry, during which "we worked intensively with the auto manufacturers, studied their financial condition, while each of them presented a program for lowering costs," will be submitted to the government in the first quarter of 2010, he said.