Renault sells stake in Avtovaz, with buyback option

Renault is set to sell its majority stake in Russian automaker Avtovaz to a Russian science institute, the French automaker said on Monday, adding that the deal consists of a six-year option to buy back the stake.

Renault is the most exposed to the Russian market among all Western automakers. It added that it’s holding of almost 67.69% in Avtovaz would be sold to the Russian Central Research and Development Automobile and Engine Institute, called Nami.

“The closing of these transactions is not subject to any conditions, and all required approvals have been obtained,” it said.

Its 100% shares in Renault Russia will go to Moscow.

“Today, we have taken a difficult but necessary decision, and we are making a responsible choice towards our 45,000 employees in Russia,” said CEO Luca de Meo.

The move preserved the automaker’s performance and its ability to return to the country in the future in a different context, he added.

The company, which is 15% owned by the French government, confirmed a non-cash writedown of nearly 2.2 billion euro ($2.29 billion) to reflect the possible costs of suspending operations in Russia.