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. Last Updated: 07/27/2016

MMK Agrees to Restructure AvtoVAZ Debt

Magnitogorsk Iron & Steel Works, or MMK, said Tuesday that it had agreed to restructure AvtoVAZ's overdue debt as part of a long-term cooperation and supply deal.

MMK chairman and majority owner Viktor Rashnikov signed the agreement with AvtoVAZ president Boris Alyoshin, the statement said. The size of the debt was not disclosed.

The Russian auto industry owed MMK a combined 3 billion rubles ($88 million) at the end of 2008, Interfax reported

Under the agreement, MMK will "make regular deliveries of a guaranteed volume" to AvtoVAZ, the statement said, without specifying the volume. In the second and third quarters of 2009, the companies will agree on a pricing plan based on MMK's production costs and the debt repayment schedule, it said.

The government has made saving AvtoVAZ, a major employer in the Samara region, a top priority, and Prime Minister Vladimir Putin promised loans and aid worth more than $1 billion on a visit to the plant last month.