AvtoVAZ Takes Over IzhAvto

OAO AvtoVAZ has closed a deal to buy 100% of United Automobile Group, the owner of carmaker OAO IzhAvto, from Sberbank Capital. The value of the deal amounted to RUB1.7 billion (app. €40 million).

AvtoVAZ, its state-owned shareholder Rostechnology and Sberbank, IzhAvto’s largest creditor, signed a memorandum of understanding regarding the deal in December 2010.

AvtoVAZ's CEO Igor Komarov said AvtoVAZ would invest RUB7 billion (app. €166 million) in modernizing the Izhevsk facility in the coming three or four years, and that the project would increase capacity at the plant from the current 220 thousand to 360 thousand cars per year. Funding will be provided by Sberbank for a period of seven years.
AvtoVAZ is to coordinate the development program of IzhAvto, including the plant’s future lineup, with its shareholder Renault-Nissan in the next five or six months.

IzhAvto currently produces the Lada 2104 and 2107 ’Classic’, as well as Izh-27175 van.