MOSCOW -- AvtoVAZ plans an 85-billion-ruble ($1.31 billion) recapitalization plan as part of efforts to meet weighing financial commitments.
The proposal is expected to raise about 25 billion rubles this year through an open subscription for shares in December, AvtoVAZ said in a statement on Monday. It will be put to shareholders at an extraordinary general meeting on Oct. 10.
The Renault-Nissan alliance, which majority owns the Russian automaker, and Russian state co-owner Rostec, have already agreed to participate in the recapitalization, AvtoVAZ said.
AvtoVAZ issued a plea for help to shareholders earlier this year after plunging demand at home drove it to a record loss in 2015 and an audit revealed the extent of its frail finances.
AvtoVAZ said last month that its main plant in Togliatti will move to a four-day week starting mid-October as the market continues to be hit by sluggish demand.
Despite the move, the Lada maker reported a 4 percent rise in sales in Russia in July on the success of its new XRay SUV and Vesta sedan. In contrast, the overall Russian market, which is mired in a recession, fell 17 percent.
Hit by the collapse of Russia's once-booming autos industry, the automaker recorded an operational loss of 27.6 billion rubles, including impairment charges, for the first six months of 2016.
AvtoVAZ Chairman Sergei Skvortsov said that the measures are necessary to meet the company's goal of increasing market share, achieving positive free cash flow and boosting in its profitability.
Automotive News Europe contributed to this report