MOSCOW (AP) -- Major Russian carmaker GAZ will receive state guarantees of 20 billion rubles ($630 million) for its loans, a top government minister and company officials said Wednesday.
First Deputy Prime Minister Igor Shuvalov said the government's anti-crisis commission had decided to provide the struggling carmaker with the 20 billion rubles in state guarantees.
Shuvalov told Prime Minister Vladimir Putin that the government would do its best to issue the guarantees by August 1. Putin reacted by urging him to do this "as soon as possible," according to a government Web site transcript.
The decision will help the company to back its unsecured loans, end this year with no losses and service its credit portfolio, GAZ said in a statement. The carmaker's debt stood at more than 44 billion rubles, the company's senior executive said earlier this month.
GAZ is controlled by billionaire tycoon Oleg Deripaska's Basic Element, the heavily leveraged investment vehicle that has been battered by the global economic crisis.
The development comes one month after Putin gave a public reprimand to the billionaire, shaming him for failing to help employees of one of Deripaska's factories, who had been unpaid for months.
Last month, GAZ teamed up with government-run Sberbank and Canadian auto supplier Magna to make a bid for German carmaker Opel.