KOMMERSANT. AvtoVAZ has found a buyer for its subsidiary bank, Lada-Credit. The bank will be acquired by Novicombank, which is close to AvtoVAZ and its major shareholder, Vedomosti business daily wrote on Tuesday.
A source close to Novicombank’s BoD and an AvtoVAZ executive said Novicombank is going to buy midsized Togliatti-based Lada-Credit. The Russian auto giant owns a 20% stake in Novicombank and it is the sole owner of Lada-Credit.
Information about Lada-Credit’s sale is also available in the auto maker’s annual report. The report runs the lender’s sale will be completed in the third quarter of 2010, while the decision itself to sell the bank was taken in December 2009.
Lada-Credit primarily lends AvtoVAZ consumers and the auto producer wants the bank to operate regardless of whether or not the auto maker will be able to fund its operations, a banker familiar with details of the transaction said. On top of this, after the sale the auto plant will not need to incorporate the bank’s financials into its own financial statement and it has taken efforts to get rid of non-core assets, the newspaper’s source said.
An AvtoVAZ manager said the transaction has yet to be determined, but it ranges from $60 mln to $80 mln. A source close to Novicombank’s BoD assured the transaction price will be smaller. AvtoVAZ and Novicombank representatives declined to comment, while Lada-Credit’s press service was not available for comment.
The deal makes no economic sense, as this is just the assignment of an asset to the controlled structure, a finance professional who deals with AvtoVAZ believes adding “the price tag won’t be less than the lender’s capital, as the auto maker does not need odd, albeit modest, losses”.
For the record, AvtoVAZ acquired a 20% stake in Novicombank for Rub 1.6 bln in 2008. The bank says on its web site that it acts as a financial partner of state-owned corporation Rostekhnologia that holds a controlling stake in AvtoVAZ.
