The FINANCIAL — According to RIA Novosti, Russia's prime minister said on March 30 that the country's largest car producer, AvtoVAZ, is likely to receive a state bailout of over $590 mln to keep it afloat amid sluggish sales and soaring debts.
The company, based in the Volga city of Togliatti where it dominates the local economy, currently owes $1.3 billion in bank loans and bonds. Car output in the first two months of the year was 77% lower than in the same period of last year.
Meeting with workers at the plant, Putin said the level of state support for AvtoVAZ, to be announced this afternoon, would be "substantial and large-scale."
"Today we will discuss, and take a final decision on the level of financing for AvtoVAZ, to enable the company to pay off all suppliers and cover debts. A figure of over 20 billion rubles ($590 mln) is being discussed," he said.
Putin said that after receiving state support, the company would be in a position to attract further credit of at least 90 billion rubles ($2.6 bln) to fund its new product line.
He also reassured workers at the plant that they were "100%" guaranteed to keep their jobs.
Finance Minister Alexei Kudrin earlier this month singled out Togliatti's AvtoVAZ, along with truckmaker GAZ in Nizhny Novgorod, as companies the government would have to save to avoid mass unemployment in those cities.