Russia Warns Renault To Help Avtovaz

MOSCOW (AP) -- Prime Minister Vladimir Putin warned Renault on Friday that if it does not do more to help Russia's troubled carmaker AvtoVAZ it could see its 25 percent stake in the company reduced.

Putin said the Russian government has protected Renault's interests by providing hundreds of millions of dollars in loans this year.

"Now either they continue participating in financing the company or we will need to agree with them on which stakes each party has," Putin told government ministers, the Interfax news agency reported.

AvtoVAZ, Russia's largest carmaker, which has been losing money for years, has seen demand for its Lada sedans fall sharply in 2009 due to the economic downturn. The company announced last week that it will lay off more than a quarter of its work force.

A spokeswoman for Renault, Axelle de Ladonchamps, said the French company would have no immediate comment, but she noted that it had invested $1 billion in AvtoVAZ.

Renault paid $1 billion for its 25 percent stake in early 2008. Russian Technologies, a sprawling state-controlled conglomerate, retains another 25 percent. Investment bank Troika Dialog also has 25 percent, and the remaining quarter is floated on the market.

First Deputy Prime Minister Igor Shuvalov said the government would be meeting representatives of Renault and Nissan Motor Co. on Monday "to discuss with them the plans that we have regarding AvtoVAZ," Interfax reported.

Renault and Japan's Nissan have a joint venture with cross shareholdings. AvtoVAZ has expressed interest in assembling Nissan sedans.

Putin announced in March that AvtoVAZ would get an interest-free long-term loan of 25 billion rubles (then $735 million) from Russian Technologies. He said Friday that these funds had been disbursed.

The prime minister said at the time that the government bailout would not threaten shareholders' stakes.

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