French carmaker Renault plans to sell its stake in Russia’s Avtovaz for a symbolic sum of 1 ruble, the Russian Trade Ministry announced on Wednesday.
Renault will transfer its 68% stake to the auto research institute NAMI Russia, known for designing the Aurus Senat, the country’s first luxury car, currently used by President Vladimir Putin. Renault apparently took the step as it lacks the ability to maintain its Russian operations.
The Trade Ministry also said Renault's factory in Moscow, which produces cars under the Renault and Nissan brands, would be transferred to the city's government.
Renault has declined to comment on the deal.
The trade ministry said the French carmaker will have the right to buy back its Avtovaz stake within five to six years, if the company wishes to return to the Russian market.
“But if during this period we make investments, then that will be taken into account when it comes to the cost [of the shares]. We won't be giving any presents here,” Trade Minister Denis Manturov said, commenting on the move.
The deal comes as Western companies try to navigate the new economic realities. Western states have placed unprecedented sanctions on Russia over the past two months in retaliation for Russia’s military operation in Ukraine.
With many international companies under pressure to quit the Russian market, the Yale School of Management estimates that more than 750 firms are ending or scaling back their Russia operations.
Renault has until now been the most Russia-exposed Western carmaker. The company announced a suspension of operations at its Moscow plant last month, estimating the cost of the move at €2.2 billion ($2.3 billion).
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