KamAZ to Shut Plant For Month

Truck maker KamAZ, in which Germany's Daimler took a 10 percent stake last week, said Wednesday that it would halt assembly lines from Friday until Jan. 19.

"This is linked to a huge amount of unsold stock. ... Russia is in hibernation. There is no demand," KamAZ spokesman Vladimir Samoilov said.

KamAZ was down 4 percent on the MICEX, well below the exchange's main index, which closed down 0.3 percent. Daimler's stock was up 2.8 percent Wednesday evening.

Russia's construction firms and heavy industries, where KamAZ finds most of its customers, have been forced to scale back production and cancel projects because of the global financial crisis. Daimler, the world's largest truck maker, is seeking access to what it says will become one of the largest truck markets in Europe.

On Friday, the company signed a deal to pay Troika Dialog $250 million for the 10 percent stake. The deal calls for a further $50 million to be paid in 2012 if KamAZ meets earnings and sales targets.

The German Federal Cartel Office, the country's anti-monopoly regulator, approved the deal, according to a posting on its web site Wednesday.

The German company had been in talks with Troika since July about buying 42 percent of state-controlled KamAZ while also considering setting up its own plant. Daimler limited itself to a 10 percent stake to "minimize risks" during the crisis.

(Reuters, Bloomberg)