GAZ Sees Higher Credit Costs

Carmaker GAZ said Tuesday that it halted production of light commercial vehicles for four days because of increased credit costs.

GAZ, controlled by a unit of Oleg Deripaska's Basic Element, closed its plant in Nizhny Novgorod and will shift to a more flexible production schedule for up to three months, said Yelena Matveyeva, spokeswoman for Deripaska's Russian Machines division.

The decision will not affect GAZ's annual output, Matveyeva said. The stoppage this week will cut production of Gazel light commercial vehicles by about 2,000 units, she said.

Basic Element has denied it is facing liquidity problems.

Deripaska, ranked Russia's richest person by Forbes magazine, ceded a one-fifth stake in Canadian auto parts manufacturer Magna to an unidentified bank that financed the deal, Magna said Friday.

Over the past 18 months, Deripaska's acquisitions have included a 30 percent stake in Austrian builder Strabag, and United Company RusAl, in which he is the majority shareholder, bought 25 percent in Norilsk Nickel.

RusAl took out a $4.5 billion loan in March from a consortium of international banks to finance the Norilsk purchase. The nickel miner's shares have plummeted by more than 70 percent from their high in May.

On Tuesday, RusAl said it had no plans to sell the "strategic" stake after its shares plunged Monday on speculation that it might.

Bloomberg, MT