OREANDA-NEWS. April 7, 2009. The state could either extend a RUB 25 bn loan issued to AvtoVAZ or capitalize it in a year, Vice PM and Finance Minister Alexei Kudrin said in a speech before the State Duma. According to him, “the final decision will depend on revamping progress at the car maker’s facilities”.

“The loan is issued for one year and then a decision is to be adopted on whether to extend the repayment period, capitalize it in order to raise the state’s stake in the car maker’s charter capital or repay this amount”, Kudrin said.

The finance minister pointed out that this measure, a RUB 25 bn loan, “has launched an upgrade mechanism for entire AvtoVAZ”. In addition, private co-financing of the upgrade program should be as high as RUB 98 bn.

These financial resources are to be allocated for developing new car models so that in three years AvtoVAZ could manufacture new cars capable of competing with the best international models’, Kudrin noted. We accepted this measure (floating a loan) only provided that RUB 98 bn is invested, he stressed.