Renault will transfer AvtoVAZ stake to Russian science institute, Russia says

Renault  will transfer its 68 percent stake in Russia's biggest carmaker, AvtoVAZ, to an auto research institute for one symbolic rouble, Russia said on Wednesday, the latest example of local institutions snapping up bargains as Western companies flee.

The trade ministry also said Renault's factory in Moscow, which produces cars under the Renault and Nissan brands, would be passed to the city's government, in another sign of what Russian authorities plan to do with Western assets.

Renault and the French government, which owns a 15 percent stake in Renault, both declined to comment on the deal, which was first reported by Russian news agencies citing Trade Minister Denis Manturov.

Renault decided to transfer its stake in AvtoVAZ, which owns the Lada brand, to NAMI because it lacked the ability to keep its Russian operations going, the trade ministry said.

Renault would have the right to buy back its AvtoVAZ stake within five to six years from NAMI, an institute founded over century ago behind the design and building of Russia's cars and trucks, including the limousines used by President Vladimir Putin.

Manturov hinted that it would cost Renault more than 1 ruble to buy back the stake. "If during this period we make investments, then that will be taken into account when it comes to the cost. There won't be any presents here," Interfax quoted Manturov as saying.

Renault is the Western automaker most exposed to the Russian market. The company said last month it would suspend operations at the Moscow plant amid mounting pressure over its continued presence there after Russia's invasion of Ukraine.

Renault builds three models based on the Dacia Duster platform at the Moscow plant.

AvtoVAZ builds Ladas, Russia's top-selling brand, at its own factories and has about 22 percent of the local market.

Last month Renault said it was considering a 2.2 billion euro ($2.3 billion) non-cash writedown to reflect the potential costs of suspending operations in Russia. The automaker got about 10 percent of its revenue from Russia last year.

Renault first acquired a 25 percent share in AvtoVAZ in 2008 at a cost of more than $1 billion and gradually increased its stake, fully consolidating AvtoVAZ into its balance sheet in 2017. It invested heavily to modernize the vast Togliatti factory and update Lada's bare-bones models. 

Moscow's invasion of Ukraine on Feb. 24 has prompted a mass corporate exodus from Russia, leaving behind assets worth billions of dollars. More than 750 companies have announced they are curtailing operations there to some degree, according to the Yale School of Management.

Russia has said it will consider repatriation of assets of foreign companies that shut down operations after the invasion.

On Wednesday, another large French company, Schneider Electric, said it would sell its operations in Russia and Belarus to local management, and would write off up to 300 million euros ($319 million) of net book value.

There are only a few examples of interest from foreign companies in taking over Russian businesses.

Anheuser-Busch InBev is in talks to sell its stake in its Russian and Ukrainian venture to its Turkish partner, in a deal that could result in a $1.1 billion charge for the world's largest brewer.

British energy company Shell was reported to be in talks with some Chinese firms to sell its stake in a major Russian gas project. Shell declined to comment on the report.

Bloomberg contributed to this report