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  Tuesday, July 16, 2019
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A Russian automotive industry spokesman said on Wednesday the board
A Russian automotive industry spokesman said on Wednesday the board of AvtoVAZ will consider an offer from U.S. giant General Motors for a stake in Russia's largest carmaker.

The official did not disclose a timeframe for a decision on the sale, saying only that GM was one of the contenders for a stake in AvtoVAZ.

"Talks are underway with the company on the transfer of AvtoVAZ shares, and GM is under equal conditions with other foreign companies bidding for the stake," the representative said.

The Associated Press quoted GM spokesman Marc Kempe as saying the company recently submitted a formal bid for a stake in AvtoVAZ to increase its role in the country's rapidly growing market. GM, the world's largest car producer, has two plants in Russia and is currently building a third.

The spokesman did not specify size of the stake in AvtoVAZ, or the price the company was prepared to pay for it.

Sergei Chemezov, former head of Russia's arms exporter Rosoboronexport, earlier said the company was set to sell a blocking stake in AvtoVAZ to a Western car manufacturer in a bid to find a long-awaited strategic partner. He named GM, Fiat, Renault and Magna as possible contenders.

Rosoboronexport, which controls AvtoVAZ, values the company at about $4 billion.

In 2006, the carmaker received 2.5 billion rubles ($100 million) in net profit, almost 80% more than in 2005. Revenue in 2006 gained 15% on 2005 to reach 152.4 billion rubles ($6.1 billion). In 2007, the company expects to receive 166 billion rubles ($6.6 billion) in revenue.

GM has had a joint venture with AvtoVAZ since 2001 in Togliatti on the Volga River, where the Russian company is based. However, the partnership has encountered difficulties since the Russian government took control of AvtoVAZ in 2005, resulting in a temporarily halt in production last year.


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