7 Feb 2023 13:36

Avtovaz closes deal to buy 99% of former Nissan plant in St. Petersburg from NAMI for 1 euro

MOSCOW. Feb 7 (Interfax) - Avtovaz has closed a deal to acquire a 99% stake in the former Nissan plant in St. Petersburg, Nissan Manufacturing Rus LLC, from FSUE NAMI, which reports to the Russian Industry and Trade Ministry and to which the Japanese concern transferred its assets when exiting Russia.

The Avtovaz press service said the corresponding documents were signed on Tuesday by the company's president, Maxim Sokolov, and the general director of FSUE NAMI, Fyodor Nazarov. The Russian government had approved the deal.

Avtovaz acquired a 99% stake in Nissan Manufacturing Rus LLC for 1 euro, paid in rubles at the exchange rate on the day of payment. NAMI will retain the other 1%.

The deal contains a call option for Nissan to buy back its former assets in Russia for six years, if a decision is made in the future and such a decision is approved by the Russian authorities.

"The focus of our work today is to maximize production and supply in the Russian automotive market. In response to current challenges, the Avtovaz team has the task of not only launching car production at the site in St. Petersburg, but also ensuring a steady increase the localization of products manufactured there," the press service quoted Albert Karimov, deputy Industry and Trade Minister responsible for the automobile industry, as saying.

Maxim Sokolov confirmed plans announced earlier by Avtovaz to utilize the St. Petersburg site and launch production in the second half of this year "These will be new models under the Lada brand in segments C and D. Production this year may be up to 10,000 units. Going forward, our team's high professional competencies can ensure an increase in production volumes to almost any level if there is demand in the Russian market. We will localize these vehicles in 2024-2027, when the key task will be to draw as much as possible on the capabilities of more than 30 regional auto component suppliers," Sokolov said.

The Nissan plant opened in St. Petersburg in June 2009. Investment in the first stage reached $200 million, and investment in expansion reached 167 million euro. The enterprise manufactured the models X-Trail, Murano, Qashqai, and Terrano. Its capacity is 100,000 cars a year.

In late October, Nissan announced a decision to transfer its Russian assets, including the plant, production and research facilities in St. Petersburg, as well as the sales and marketing center in Moscow to the ownership of the federal state unitary enterprise NAMI, which reports to the Industry and Trade Ministry. The transaction was concluded for a symbolic price. It envisages an option to buy the assets back within six years. The deal was closed at the end of November. Due to its exit of the Russian market, the Japanese auto concern wrote off 24.1 billion yen or around 181 million in a lump sum.