Renault has found a way to appease Russian Prime Minister Vladimir Putin that didn't involve writing a check for $850 million. The French company took a 25% stake in Russian carmaker Avtovaz, and when Avtovaz started having a hard time of it earlier this year Renault looked content to see how things turned out. Putin wasn't: he told Carlos Ghosn to inject cash into Avtovaz, or Putin would dilute Renault's stake with a share sale.

Things retreated from the cliff when Renault promised technology to Avtovaz, in return for which Russia would put 50 billion rubes ($1.7 billion U.S.) into the company. Renault's technology share is valued at €240 million ($358 million U.S.). The know-how could be of greater assistance to both companies than if Renault had contributed cash: Avotvaz gets something it can build on long term, and Renault doesn't have to throw good rubles after bad.

Avtovaz is nowhere near rescued, however. The company remains loaded with debt, making it difficult to finance its restructuring, and sales of its primary vehicle, Lada, haven't rebounded. And to hear Putin tell it, he could be knocking on Renault's door again soon.

[Source: Bloomberg | Photo: PIERRE VERDY/AFP/Getty Images]

I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.

    • 1 Second Ago
  • 2015 Toyota Highlander
    MSRP: $29,765 - $44,140
    2015 Jeep Grand Cherokee
    MSRP: $29,995 - $64,895
    2015 Honda Accord
    MSRP: $22,105 - $33,630
    2015 Honda Civic
    MSRP: $18,290 - $26,740
    2015 Mazda Mazda3
    MSRP: $16,945 - $25,545
    Share This Photo X