By May 10, the concerned departments must coordinate a draft government resolution on allocating 25 billion roubles in the form of property contribution to Russian Technology' statutory capital. The Ministry of Industry and Trade will then submit the document to the Government for consideration.
A Ministry of Industry and Trade official said the document had not yet been coordinated but that everything was proceeding as planned and that the sum total remained the same. Consequently, AvtoVAZ will only receive the funding by late June, a Government Staff official said. A top corporate manager said the plant was counting on this deadline.
AvtoVAZ is preparing to receive the funding. An extra meeting of shareholders is scheduled to approve the loan on May 29, a corporate spokesperson said. AvtoVAZ CEO Boris Alyoshin said the 25 million rouble sum would be used to replenish corporate working capital and to repay 15 billion roubles owed to suppliers.
The Industry and Trade Ministry official said it would not be necessary to once again prove the need for the allocation; nor are there any further prerequisites to receiving it.
The lack of demand is the main problem facing AvtoVAZ, said Uralsib analyst Natalia Sorokina. A corporate manager admitted that about 90,000 cars were currently being stored in warehouses. Sorokina said the company would quickly disburse the 25 billion rouble sum and would beg for additional funding if sales did not resume.