OREANDA-NEWS. November 12, 2009. Russian Prime Minister Vladimir Putin stated that the government will give AVTOVAZ RUB54bn (US 1.88bn) to refinance its current debt and to finance capex. In addition, about RUB3bn (US 105m) will be added to state purchases of cars through YE09, reported the press-centre of OTKRITIE FC.

View: Such a large subsidy will resolve most of AVTOVAZ's problems with debt, which exceeded US2bn rubles at the end of 1H09 (IFRS). However, the company still has not produced an exact plan for its investment program aimed at the renewal of its model line.

As for the additional state purchases of 3bn rubles, this corresponds roughly to 10,000 cars, or about 8% of monthly car sales in Russia – which is a slight positive for the industry overall.