Russia's AvtoVAZ: Has Proposed GM Sell Its Stake In Their JV
25 Juni 2009 - 6:53PM
Dow Jones News
Russian car marker OAO AvtoVAZ (AVAZ.RS) has proposed that
General Motors (GM) sell its stake in their joint venture, the
company's Chief Executive Boris Alyeshin said Thursday.
The joint venture assembles a small sport-utility vehicle, the
Chevrolet Niva, in AvtoVAZ's home city of Togliatti, and last year
sold 47,000 cars.
Alyeshin told Russian news agency Interfax that AvtoVAZ asked GM
to name a price for its stake in the venture before June 25. The
CEO said that GM has failed to answer, and that AvtoVAZ "will soon
prepare a short official directive on the issue".
An AvtoVAZ spokesman confirmed Alyeshin's statement, but
declined to give details of the directive or comment further.
General Motors also declined to say whether it has received a
proposal from AvtoVAZ.
The plant where the Niva is assembled is one of GM's most
profitable plants, and the company last year said it had no plans
to sell its 41.6% stake.
AvtoVAZ also owns 41.6% of the venture, and the European Bank of
Reconstruction and Development owns the rest.
AvtoVAZ has struggled to finance its own operations this year,
and halted production lines early in the year as it sold off the
stock of cars which accumulated last year after Russian demand for
cars collapsed.
If AvtoVAZ does buy GM's stake it may annoy auto-parts supplier
Magna International Inc.(MG.A.T), which is hoping to take a stake
as part of its deal to take over Adam Opel GmbH, GM's European
business.
Company Web site: www.avtovaz.ru
-By Will Bland, Dow Jones Newswires; +7 495 937 8445;
william.bland@dowjones.com