Report: AvtoVAZ mulls delisting from Moscow Exchange in 2017

MOSCOW, Mar 27 (PRIME) -- Russia's largest carmaker AvtoVAZ is considering a delisting from the Moscow Exchange after a secondary share offering later in 2017, Reuters reported on Monday, citing two sources familiar with the matter.

The move would allow AvtoVAZ, majority-owned by French car giant Renault and its alliance partner Nissan, to stop disclosing financial results and reduce costs after being hit by the collapse of Russia's once-booming auto industry, where annual vehicle sales have more than halved since 2012.

Both sources, who spoke on condition of anonymity to discuss confidential matters, said the purchase of a 24.1% stake in AvtoVAZ by Russian investment bank Renaissance Capital late last year was part of the delisting plan.

The sources, one close to AvtoVAZ’s management and another who has been briefed by senior shareholders, declined to give further details on the bank's involvement, explain why it was needed, or say why AvtoVAZ management wanted to delist.

Rencap's stake purchase was part of a larger recapitalization plan for the loss-making Lada maker, which posted a net loss of 44.8 billion rubles in 2016.

AvtoVAZ now plans to offer investors 9.25 billion shares priced at 10.3 rubles each in a second issuing later this year. The shares will be placed via a closed subscription with Alliance Rostec Auto B.V., a holding company jointly owned by Renault-Nissan and Russian state conglomerate Rostec, as a potential buyer.

AvtoVAZ, Rencap and Rostec declined to comment.

A Renault spokeswoman said: "This is not on the agenda. Our focus for now is the ongoing capital restructuring of AvtoVAZ." The company declined further comment.

(57.4247 rubles – U.S. $1)

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