Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Gref Says State Directors to Join AvtoVAZ Board

Economic Development and Trade Minister German Gref on Thursday broke the government's silence on AvtoVAZ by confirming that a number of state-backed executives were set to join the company's board.

Two representatives from state arms exporter Rosoboronexport and a Federal Industry Agency representative will join the carmaker's 12-member board, Gref said Thursday, Interfax reported.

The minister's comments partially confirm earlier reports and follow weeks of speculation that the state is tightening its grip on AvtoVAZ by buying stock and pitching managers for the board.

Speaking a month after the resignation of the company's long-serving chief Vladimir Kadannikov, Gref said a new strategy for the Lada maker was urgently needed.

"I think now, after the change in management, we will finally decide the company's future," he told reporters in Cheboksary.

The board will be elected at an extraordinary shareholders' meeting on Dec. 22.

Earlier Thursday, Kommersant reported that Rosoboronexport was set to buy 60 percent of the country's largest carmaker, AvtoVAZ, for $700 million, with financing coming from state-owned Vneshtorgbank.

Gref said he did not know if the state would get a controlling stake in the carmaker, Interfax reported.

He said the Economic Development and Trade Ministry, as well as other ministries, had discussed the need to develop a rescue plan for the carmaker, which is one of the country's largest employers and has been hit in recent years by foreign competition.

Gref also said that Volkswagen had decided to begin investing in Russia next year, citing representatives from the German car giant whom he had met with a day earlier, RIA-Novosti reported late Thursday. Volkswagen has not finalized its plans for Russia, company spokesman Hartwig von Sass said Thursday from Wolfsburg.

Kommersant reported that Rosoboronexport would buy two AvtoVAZ subsidiaries, AVVA and TsO AFK, which jointly control 61.8 percent of the company. Rosoboronexport and Vneshtorgbank declined to comment on the report.

Gref did not identify any of the board candidates by name.

Vneshtorgbank senior vice president Vasily Titov and Federal Industry Agency chief Boris Alyoshin both confirmed that they were candidates for the carmaker's board, Kommersant reported Thursday.

Another candidate named in previous reports is Rosoboronexport deputy general director Vladimir Artyakov.

According to Kommersant, the deal to sell the two units to Rosoboronexport was set in motion on Oct. 27, the same day that Kadannikov resigned.

An unidentified person close to AvtoVAZ told Interfax that no agreement had been made to sell the units to Rosoboronexport.