By John Meyer, finance consultant. Eurasia Business News – March 24, 2022
The Renault Kaptur crossover, one of best selling models in Russia.
Renault Group on Wednesday evening announced that it was suspending the work of its plant in Moscow.
“The Board of Directors met today and decided to suspend the work of the Renault plant in Moscow from today,” the company said in a statement on its website.
Renault also stated that the group is considering possible options regarding its stake in AvtoVAZ, but at the same time promises to act responsibly in relation to its 45,000 employees in Russia.
“Renault Group reminds that it is already implementing all the necessary measures to comply with international sanctions,” reported the group in the statement.
The carmaker adds that it has already begun to take the necessary measures to comply with international sanctions.
Renault Group added that a non-cash adjustment charge amounting to the accounting value of the consolidated intangible assets, property, plant and equipment and goodwill should be recorded at the time of the 2022 first half results. As of December 31, 2021, this value amounted to 2,195 million euros.
The Russian AvtoVAZ, which produces Lada and Renault cars at its plants in Togliatti and Izhevsk, until the end of 2021 was 100% owned by the Dutch Alliance Rostec Auto B.V. – a joint venture of Rostec (32%) and Renault Group (68%). At the end of last year, the transfer of 100% of AvtoVAZ shares to the Russian jurisdiction, under the control of the local Lada Auto Holding LLC. The shareholding structure did not change – 68% for Renault Group and 32% for Rostec.
Renault and AVTOVAZ have strengthened their ties since 2008. Since January 2017, AVTOVAZ has been consolidated in the accounts of Renault Groupe while LADA, AVTOVAZ’s own brand is now the Renault Group’s 5th brand alongside Renault, Dacia, Renault Samsung Motors and Alpine.
Renault shares closed 0.8% lower on March 24 on the Paris Stock Exchange, slightly underperforming the CAC 40 index (-0.4%).
The Western manufacturer most exposed to the Russian market, Renault said the day before it planned to pass a charge of 2.2 billion euros in the first half to depreciate its assets in Russia.
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