December 30, 2016 / 6:02 PM / 7 months ago

Renaissance Capital buys into carmaker Avtovaz, helping Renault

3 Min Read

A view shows an entrance to the plant of carmaker AvtoVAZ in the city of Togliatti, Russia, in this February 24, 2016 file photo.Gleb Stolyarov/Files

MOSCOW/PARIS (Reuters) - Russia's Renaissance Capital has acquired a 24.1 percent stake in Russian carmaker Avtovaz (AVAZ.MM) in a capital increase that also sees Renault (RENA.PA) tighten its control over the loss-making manufacturer, according to a regulatory filing on Friday.

The investment firm purchased the stake in a 26.1 billion rouble ($426 million) share issue, part of a larger recapitalization plan for the loss-making Lada maker, hit by the collapse of Russia's once-booming auto market.

Under the new issue, Renault has also raised its controlling stake in Avtovaz to more than 47 percent from about 37 percent, through the holding company it owns jointly with alliance partner Nissan (7201.T) and Russian state conglomerate Rostec.

Renaissance's 11.25 billion rouble investment in the open subscription meant Renault was required to inject less cash than the 25 billion roubles it had pledged as a maximum contribution to keep Avtovaz afloat, a company spokesman said.

"The objective of the open subscription has been achieved," the spokesman said.

The Renault-led holding, ARBV, bought 1.65 billion new shares for 14.85 billion roubles on the French carmaker's behalf, the company said, increasing its share of the holding to more than 73 percent from 50 percent.

The ARBV holding in turn sees its controlling Avtovaz stake diluted from 75 percent to below 65 percent under the deal.

Renault, which paid more than $1 billion for a first 25 percent stake in 2008, plans to begin consolidating Avtovaz sales in its own accounts for the full-year 2017.

Renaissance Capital declined to comment. The regulatory filing gave no indication of whether the firm had purchased the Avtovaz stake for its own account or on behalf of a client.

Avtovaz and Onexim group, which manages assets of Russian tycoon Mikhail Prokhorov and owns Renaissance Capital, both declined to comment.

New Avtovaz stock was issued at 9 roubles per share in the placement, the company said earlier this week. The shares were trading at 9.66 roubles on Friday.

Reporting by Gleb Stolyarov, Polina Devitt and Laurence Frost; Editing by Susan Thomas

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