Reuters: Financial Services and Real Estate: TEXT-Fitch afrms AvtoVAZ on Renault/Nissan acquiring indirect majority stake

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TEXT-Fitch afrms AvtoVAZ on Renault/Nissan acquiring indirect majority stake May 4th 2012, 08:56 Fri May 4, 2012 4:56am EDT May 04 - Fitch Ratings has affirmed JSC AvtoVAZ's Long-term foreign and local currency Issuer Default Ratings (IDR) at 'B-'. The agency has also affirmed AvtoVAZ's Short-term foreign and local currency IDRs at 'B', National Long-term rating at 'BB(rus)', foreign and local currency senior unsecured rating at 'B-' and Recovery Rating at 'RR4'. The Outlooks on the Long-term ratings are Stable. The affirmation follows AvtoVAZ's announcement that Renault SA ('BB+'/Stable), Nissan Motor Co ('BBB'/Stable) and state corporation Russian Technologies (RT) will form a joint venture (JV) which will result in Renault and Nissan to hold a combined majority stake in AvtoVAZ. Renault and RT will initially contribute their current respective 25% stakes to the JV. Then, by 2014, Renault and Nissan will invest a further USD750m (Renault, USD300m and Nissan, USD450m) in the JV while the JV will acquire the Russian investment company Troika Dialog's current 25% stake in AvtoVAZ. By 2014, Renault and Nissan will hold a 67.13% stake in the JV, which will itself hold 74.5% of AvtoVAZ. Therefore, Renault and Nissan will indirectly control a majority stake of AvtoVAZ.

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