MOSCOW/PARIS -- Renault is poised to raise its bet on Russia, voting with other shareholders in troubled AvtoVAZ to launch an 85 billion ruble (1.2 billion euro) recapitalization in which the French carmaker may be the sole cash contributor.
Renault will fund most or all of the rights issue put to shareholders - 30 percent of the overall capital hike - as it increases its stake in the Lada maker to more than 70 percent and consolidates its accounts as a subsidiary.
AvtoVAZ will announce the results of a shareholder vote on the plan after a board meeting on Thursday, a company spokesman told Reuters. The announcement was originally expected on Monday. The spokesman gave no reason for the delay but said there were no problems.
The bailout shores up Renault's eight-year-old investment in AvtoVAZ, in the hope of a big payoff when the Russian economy eventually recovers from a prolonged oil price slump compounded by international sanctions. AvtoVAZ has contributed positively to Renault profit in only two of those eight years.
Renault-Nissan CEO Carlos Ghosn acknowledged the setbacks in a recent newspaper interview, underlining upbeat group earnings achieved "in spite of the collapse of the Russian and Brazilian markets, where we've invested heavily."
Renault expects the Russian auto market, which has already halved from its 3 million peak in 2012, to be down another 12 percent this year and little changed in 2017, sales chief Thierry Koskas said at the Paris auto show on Sept. 29.
Bo Andersson, installed by Ghosn as AvtoVAZ CEO in 2013, was replaced by Frenchman Nicolas Maure earlier this year after drawing fierce local criticism over cutbacks at the carmaker's sprawling Togliatti plant and local suppliers.
But the cuts and new models introduced on Andersson's watch may help the carmaker to weather the storm. Lada sales were up 5 percent in September, according to data published on Monday, bucking the Russian market's 11 percent decline.