AvtoVAZ lost its Japanese roots

Renault bought a share in the Russian automaker from Nissan.
AvtoVAZ lost its Japanese shareholder - Renault bought a stake in Nissan from Nissan (9.15%). The French concern calls this move "logical" and simply "part of the process of recapitalization." Experts agree - following the results of capitalization, the share of Nissan (which did not plan to participate in the plant's improvement) would seriously be eroded. In their opinion, the transaction will not affect the activities of AvtoVAZ in any way - the assembly of the alliance models will continue. At the same time, some interlocutors of Kommersant in the industry believe that Nissan was disappointed in the chronically unprofitable asset, and also perceive the deal as a reaction to Nissan's relationship with Renault in other markets.

French automaker Renault bought a 9.15% stake in AvtoVAZ from the Japanese concern Nissan in the joint venture Alliance Rostec Auto B.V. (controls 64.6% stake in PJSC AvtoVAZ), Renault said on Tuesday. At the end of 2016, 73.3% of Alliance Rostec Auto B.V. was Renault s.a.s., 17.55% - from the state corporation "Rostekh", 9.15% - from Nissan International Holding B.V. Thus, Nissan withdrew from the shareholders of AvtoVAZ.

In Renault, "Kommersant" was told that this transaction will not affect the projects of the alliance Renault-Nissan, existing at the moment. The concern did not disclose how the transaction would affect AvtoVAZ's activities, but noted that this step is logical, "part of AvtoVAZ's recapitalization process." At the same time, the Renault group will further represent the interests of the alliance in Alliance Rostec Auto B.V. Nissan did not get a comment yet.

After the loss of AvtoVAZ in 2015 grew threefold and reached 73.85 billion rubles., The company said the need for assistance to shareholders. Now, AvtoVAZ continues the procedure of financial recovery of the company through an additional issue of shares. During the first stage of the additional issue of the joint venture Rostech and the Renault-Nissan Alliance Rostec Auto B.V. acquired 1.65 billion shares of additional issue for 14.85 billion rubles., Cyprus Renaissance Securities Limited - 1.25 billion shares for 11.25 billion rubles.

Sources of Kommersant in the car industry disagree about why Nissan withdrew from AvtoVAZ shareholders on the eve of its recovery. One of the interlocutors of Kommersant, who are familiar with the situation, believes that the matter is that the Japanese concern is "tired" of owning a chronically unprofitable asset. In 2016, AvtoVAZ's loss decreased by 39.3%, to 44.8 billion rubles., In 2018, it is planned that the plant will go to the operational break-even. At the same time, the interlocutor of "Kommersant" is confident that this will not affect the activities of AvtoVAZ in any way, - while the assembly of Nissan at the facilities of the plant is beneficial, it will, in his opinion, continue. Another source of Kommersant assumes that this deal could be a reflection of Nissan's global relationship with Renault in other markets, and the way out of Nissan's ownership of AvtoVAZ's ownership is called a reaction to them. The idea that Nissan was disappointed in the Russian market, the source refutes. Another interlocutor of Kommersant believes that this deal is a signal that Nissan has "bad business, especially in Russia."

Nissan did not disclose loss in the global reporting of ownership of AvtoVAZ. At the end of 2015, Renault's loss from AvtoVAZ amounted to € 620 million. Nissan has withdrawn the Sentra model since the beginning of the year, however, in March its release was resumed. In 2015, the Teana model was discontinued in St. Petersburg, followed by the Tiida model in Izhevsk. According to the Association of European Businesses (AEB), in January-August, against the backdrop of recovery in demand for cars, Nissan reduced its market share by 0.3 pp, to 4.8%, brand sales increased 2%, to 46.8 thousand . pieces.

Vladimir Bespalov of VTB Capital is confident that the exit of Nissan from AvtoVAZ will not affect the activities of the companies in any way - it was initially assumed that the additional issue is made by Renault, and Nissan did not plan to participate in the process. So, following the results of the second stage of the additional issue, its share would have been diluted and would have turned out to be very small, the expert says. He believes that the alliance Renault-Nissan will continue to cooperate closely, and doubts that Nissan Almera or Datsun will cease to collect at AvtoVAZ. According to the analyst, this transaction is a technical rather than a strategic one, which can lead to drastic changes.