Renault silent after media report of Avtovaz stake transfer

Renault, the Western carmaker most exposed to the Russian market, said last month it would suspend operations at the plant amid mounting pressure over its continued presence there since the start of the conflict in Ukraine. Last month, Renault said it was considering a 2.2 billion euro ($2.3 billion) non-cash writedown to reflect the potential costs of suspending its operations in Russia.

Renault declined to comment on Wednesday on a report by Russian news agency Interfax that it would transfer its majority stake in carmaker Avtovaz to a Russian science institute for one symbolic rouble.

Shares in Renault fell by more than 1% following the report about Avtovaz, which owns the Lada brand and is Russia's biggest national automaker. Renault will have the right to buy its 68% stake in Avtovaz back within the next five to six years, Interfax reported, citing Russian Trade Minister Denis Manturov.

Manturov also said Renault's stake in its Moscow plant would be passed to the city's government, potentially offering one of the first examples of what Russian authorities intend to do with Western assets. The French state, which has a 15% stake in Renault, also declined to comment on the report.

Renault's shares were down 1.6% at 21.77 euros by 0715 GMT. Renault, the Western carmaker most exposed to the Russian market, said last month it would suspend operations at the plant amid mounting pressure over its continued presence there since the start of the conflict in Ukraine.

Last month, Renault said it was considering a 2.2 billion euro ($2.3 billion) non-cash write-down to reflect the potential costs of suspending its operations in Russia. Manturov said Renault had decided to transfer the Avtovaz stake to the Moscow-based NAMI automobile and engine research institute because it lacked the ability to keep its Russian operations going.

The deal would be worth a single rouble, he said, giving Renault the option to buy the stake back. "But if during this period we make investments, then that will be taken into account when it comes to the cost. There won't be any presents here," Interfax quoted Manturov as saying.

Commenting on the Interfax report, Credit Suisse analysts wrote: "Modest positive as this brings the issue closer to resolution, keeps the door open to return, though clearly many unknowns on when/if Russia vehicle market rebounds and geopolitical climate cools." More than 400 companies have withdrawn from Russia since it invaded Ukraine on Feb. 24, leaving behind assets worth billions of dollars.

Russia calls its actions in Ukraine a "special operation" to disarm Ukraine and protect it from fascists. Ukraine and the West say the fascist allegation is baseless and that the war is an unprovoked act of aggression. ($1 = 0.9404 euros)