12 Oct 2009 14:39

Govt considers converting Avtovaz debt to Sberbank, VTB into shares

VLADIVOSTOK. Oct 12 (Interfax) - The Russian government may convert Avtovaz debts owed to Sberbank Russia and VTB into shares in the automaker, Deputy Finance Minister Alexander Novak said.

Another option, which Avtovaz is promoting, is for "state guarantees on refinanced loans and subsidized loan interest rates," Novak said.

Renault, which owns a blocking stake in Avtovaz, might oppose issuance of supplementary shares on the debt conversion option, he said.

"Most likely everything will be clear in a month," Novak said.

Meanwhile, Novak indicated that the 11.5 billion rubles in compensation for social expenses that Avtovaz is seeking from the state would not be received in the form of a subsidy. "The budget does not provide money for that," he said.