Lada could succumb to bankruptcy
10-20-09, 09:10 AM
#1
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Lada could succumb to bankruptcy
Russian firm Avtovaz could go bankrupt if it can’t agree a restructuring deal with banks, according to a financial executive from the company.
Oleg Lobanov, the firm’s executive vice president for finance, said it needed support from banks as it wouldn’t be able to pay off its vast debts through selling its products, which include Lada cars.
“Our production plan does not allow us to generate sufficient funds to service our existing debt and pay interest,” he said. “If the other options don't succeed, then we have no other choice.”
In June, the firm, which is 25 per cent owned by Renault, had debts owed in taxes and to suppliers of around £2.2billion. The company has been hard hit by the recession and the fall in demand for new cars in Russia. It has had to cut 27,600 jobs to save money.
http://www.autocar.co.uk/News/NewsAr...llCars/244214/
Renault CEO Carlos Ghson says his firm is ready to help Avtovaz overcome its troubles.
“We are ready to support Avtovaz,” he said. We are supporting them with management and with technology. I am confident that AvtoVAZ will be able to overcome its troubles in the short term and the medium term.”
Ghosn said Renault and sister firm Nissan were ready to share small car platforms with Avtovaz in order for it to become more profitable again.
“We know that in Russia you cannot compete if you don't have a very competitive entry-level car,” he said. “The only way you can do this is to have a common platform with Avtovaz, Renault and Nissan. This is something we are working on and this is part of the alliance work.
Oleg Lobanov, the firm’s executive vice president for finance, said it needed support from banks as it wouldn’t be able to pay off its vast debts through selling its products, which include Lada cars.
“Our production plan does not allow us to generate sufficient funds to service our existing debt and pay interest,” he said. “If the other options don't succeed, then we have no other choice.”
In June, the firm, which is 25 per cent owned by Renault, had debts owed in taxes and to suppliers of around £2.2billion. The company has been hard hit by the recession and the fall in demand for new cars in Russia. It has had to cut 27,600 jobs to save money.
http://www.autocar.co.uk/News/NewsAr...llCars/244214/
Renault CEO Carlos Ghson says his firm is ready to help Avtovaz overcome its troubles.
“We are ready to support Avtovaz,” he said. We are supporting them with management and with technology. I am confident that AvtoVAZ will be able to overcome its troubles in the short term and the medium term.”
Ghosn said Renault and sister firm Nissan were ready to share small car platforms with Avtovaz in order for it to become more profitable again.
“We know that in Russia you cannot compete if you don't have a very competitive entry-level car,” he said. “The only way you can do this is to have a common platform with Avtovaz, Renault and Nissan. This is something we are working on and this is part of the alliance work.
10-20-09, 11:32 PM
#5
Lexus Fanatic
iTrader: (20)
sniip3r - that's great. 
lada has and always will be garbage.
lada has and always will be garbage.
10-21-09, 12:02 AM
#6
Thats what socialism and government ran automakers get you
Russian government even started a new protective measure last year to save LADA - they introduced a MASSIVE increase in tax on foreign vehicles. A German/Japanese car in Russia will cost you double what it costs here. It still didn't stop people from purchasing foreign vehicles, and nobody buys the garbage that LADA produces.
Russian government even started a new protective measure last year to save LADA - they introduced a MASSIVE increase in tax on foreign vehicles. A German/Japanese car in Russia will cost you double what it costs here. It still didn't stop people from purchasing foreign vehicles, and nobody buys the garbage that LADA produces.
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