State affair

VEB acquired 8.3% shares of AvtoVAZ

AvtoVAZ announced yesterday that Vnesheconombank became the owner of 8.3% of its voting shares (7% of the authorized capital). As the VEB press service explained, AvtoVAZ is financed by a number of state financial institutions, and VEB’s acquisition of a stake indicates the strengthening of the state’s role in managing the largest Russian automaker.” Previously, this stake, through the National Investment Financial Company, belonged to another state-controlled structure - Vneshtorgbank. VTB did not comment yesterday on the reason for the sale of the asset. VEB confirmed the fact of the transaction to Vremya Novostei, but did not specify the amount of the transaction. According to investment company analysts, the market value of an 8.3% stake in the plant is about $40 million. The replacement in the register of AvtoVAZ shareholders, according to market participants, essentially does not change anything - the owner of both structures is the state.

Although VEB still did not own shares in AvtoVAZ, its representatives were on the company’s board of directors. In the current composition, the directors are the first deputy chairman of the board of VEB, Nikolai Kosov, and the deputy chairman, Vladimir Yatsenko, and Mr. Kosov and deputy chairman Vasily Kirpichev have been nominated for the future composition. As Alexander Gromkov, deputy director of public relations at AvtoVAZ, told Vremya Novostey, there are no changes in the list of candidates for the shareholders meeting scheduled for May 28.

According to the head of the bank’s press service, Svetlana Nikitina, “VEB has been participating in AvtoVAZ financing programs for many years, since Soviet times, and this cooperation continues, there are plans for the future, especially taking into account the possibility of AvtoVAZ having a strategic partner." Although, according to AvtoVAZ Deputy Director of Public Relations Alexander Gromkov, the company has not yet acquired any new partners other than the American concern General Motors, with which cooperation began back in 2002.

Finmarket expert Andrei Kinyakin does not exclude that the change of owner of this stake in the car plant indicates “the government’s intention to consolidate a large stake in AvtoVAZ in the future.” While VTB specializes in commercial operations, VEB is known to be involved in government projects (servicing intergovernmental agreements, managing external debt and pension savings of the population, supporting exporters). VEB yesterday refrained from answering the question whether the bank’s share in the authorized capital of AvtoVAZ will continue to increase further (according to Aton Investment Company, about 53% of AvtoVAZ shares are controlled by the company’s management, about 18% belong to individuals, 13% -- traded on exchanges and less than 1% converted into GDR).

The government's interest in the auto industry, where most assets are already privately owned, has recently intensified. Last week, the head of the Ministry of Industry and Energy, Viktor Khristenko, personally visited AvtoVAZ and said that officials were preparing measures to support Russian car factories (including increasing duties on the import of foreign cars older than five years and, possibly, even banning the import of right-hand drive cars). And tomorrow's government meeting will be devoted to "the implementation in the medium term (2005-2008) of the priority tasks provided for by the concept of development of the Russian automotive industry."

Yana GODOVANAYA