Russian Technologies will increase its stake in AvtoVAZ to more than 40 percent, but French partner Renault will maintain its blocking stake, the state corporation's chief, Sergei Chemezov, said Monday.
Russian Technologies currently controls a stake of 25 percent plus one share, which will increase as AvtoVAZ debt is converted into shares, he said.
Chemezov did not elaborate on how the debt conversion would be conducted or how it would affect the stakes of AvtoVAZ's two other major shareholders, Renault and Troika Dialog, which now own 25 percent and 24.82 percent, respectively.
The Tolyatti-based carmaker owes a total of 65 billion rubles ($2.1 billion) to Russian Technologies.
"Clearly, the French cannot contribute such a sum right away, so the contributions will be broken up into tranches, most likely not in the form of money but as technology and equipment," Chemezov said, Reuters reported.
Russian Technologies had an option to raise its stake in AvtoVAZ under agreements reached in November 2009, when shareholders signed a memorandum on restructuring the debt-laden auto giant, Renault spokeswoman Olga Sergeyeva told The Moscow Times.
"Renault's stake in AvtoVAZ remains at 25 percent," she said.
It was not clear Monday how Troika Dialog's stake would change under the plan. The brokerage could not provide an immediate comment Monday.
A shareholders agreement on increasing equity and resulting stakes will be signed in May or early June, Chemezov said.
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