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BusinessRenault Agrees to Sell Its Stake in a Russian...

Renault Agrees to Sell Its Stake in a Russian Automaker

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But the Western limits on shipping parts to Russia soon made it impossible to keep operating the two factories.

Western sanctions targeting Russian oligarchs close to Mr. Putin also took a toll.

Renault’s partner in AvtoVAZ is Russian Technologies Corporation, known as Rostec, which holds a 32 percent stake in the venture through a Dutch holding company. Rostec is run by Sergei Chemezov, who was targeted by Western sanctions after Russia’s invasion. Mr. Chemezov is reported to be a former KGB agent who worked with Mr. Putin in East Germany before the fall of the Soviet Union.

Mr. Chemezov, who was a key interlocutor with Mr. Ghosn on the 2008 deal between Renault and AvtoVAZ, has vigorously defended Russia’s war in Ukraine as “necessary.” Among other things, Rostec also makes Russia’s Kalashnikov assault rifles, as well as ammunition, military equipment and aircraft engines.

With Russia’s economy facing a steep economic downturn as international sanctions bite, Moscow appears eager to mute the pain. Under the arrangement, Renault’s factory in Moscow will continue to produce cars. Sergei Sobyanin, the mayor of Moscow, announced Monday on his blog that the city would take over the plant, which will build passenger cars under the Moskvich brand so that thousands of employees would “not be left without work.”

Renault considered the option of being able to buy back its stake in AvtoVAZ, an important part of any deal, according to a person with knowledge of the situation. But any future buyback would depend on geopolitical circumstances at the time and the state of Western sanctions against Russia, the person added.

Renault officials did not make further comment. But Mr. Ghosn has not hesitated to speak out. In an interview with France’s BFM TV last month from his home in Lebanon, where he is living as a fugitive after escaping in 2019 from a criminal inquiry in Japan for alleged financial misconduct as head of the Nissan-Renault-Mitsubishi auto alliance, he said that the political pressures that had built up on Renault to exit Russia were “a pity.”

“Russia is not going to disappear,” he said. “It is a great country going through a difficult phase today. Obviously, Ukraine even more so. But the market will stay and one day or another, the situation will normalize.”



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