On December 6th, 2016, the Board of Directors of PJSC “AVTOVAZ” made certain strategic decisions regarding the development of the Company in the coming years.
The Board approved the budget of the company for 2017. It is based on a meticulous analysis of market opportunities, cost saving potentials and benchmarks. The results of the recovery plan implementation as well as recapitalization actions and measures are taken into account. These will positively influence the financial situation at the Company on the way to breakeven in operating margin (before impairment) in 2018/2019.
In addition, the Board approved the Company’s mid-term plan for 2017-2026 (the MTP). The MTP is the result of team work across AVTOVAZ management with the support of our shareholders that lasted for the past months. It is a strategic plan that defines clear targets (sales, profitability, cash flow) and roadmaps for their achievement. It covers all aspects of the company’s operations, including product planning, engineering, sales and marketing, manufacturing, investments, etc. The Company and its shareholders, with the support of Russian state and banks, are fully committed to strengthen the positions of AVTOVAZ as the leader of the Russian automotive industry and the LADA brand as the market leader for passenger cars.
Regarding the open subscription for the Company’s common shares which is on-going, the Board determined the price for the placement of ordinary registered non-certificated shares at 9.00 RUR per one share. The period for exercising preemptive rights by the Company’s existing shareholders ended on 2 December 2016, and the placement commenced today, 7 December 2016, and is expected to last until 26 December 2016. The open subscription is the first key step in the implementation of an overall recapitalization plan of AVTOVAZ, which will allow to finance its future markets expansion plans as well as meet its financial commitments.
Finally, new composition of the Company’s management board (Executive Committee (EC)) has been approved. Starting from December 7th, 2016, the Company’s highest day-to-day operational governance body will consist of:
Maure Nicolas - Chairman of EC, AVTOVAZ President
Bratoz Ales - Deputy Chairman of EC, Executive Vice-President (VP) for manufacturing and supply chain
Gruebel Harald - Deputy Chairman of EC, Executive VP Engineering
Ptacek, Jan - Deputy Chairman of EC, Executive VP Sales and Marketing
Frolova Elena – VP Chief Recovery Officer
Mamillapale Venkatram – VP Purchasing
Miller, Paul – VP Supply Chain
Mikhalenko, Dmitry – VP HR and social policy
Ryabov Mikhail – General Director LADA Izhevsk
Strokov Nikolay – VP Vehicle Production
Uryupin Sergey – VP Components Production
Vaino Edward - VP for external affairs and shareholders’ relations
Zhukalin Pavel – VP Security and Regime
Sergey Skvortsov, Chairman of the Board, stated that the decisions taken by the Board are crucial for the Company’s immediate and long-term future. “I highly evaluate the huge job made by AVTOVAZ management team in terms of driving the Company to future recovery. We believe in the growth of the Russian automotive market, the development of export sales and further deep localization of the suppliers’ base”, said Mr. Skvortsov.
Denis Le-Vot, Vice-chairman of the Board, representing Alliance Renault-Nissan, expressed clear commitment of the Alliance in the recovery and development of AVTOVAZ and LADA brand. “Deeper cooperation with Alliance Renault-Nissan allows the Company to use best international practices and technologies. The Company’s factories in Togliatti and Izhevsk manufacture a wide range of cars under the LADA, Renault, Nissan and Datsun brands to Alliance standards. We see strong commitment of the Company’s top management team to the recovery plan and confirm our commitment to support these strategic initiatives”, added Mr. Le-Vot.
PJSC “ AVTOVAZ” is the largest manufacturer of Renault-Nissan Alliance in Russia and its Togliatti plant is one of the largest car plants worldwide, producing cars in full cycle under 4 brands (LADA, Renault, Nissan and Datsun). AVTOVAZ Izhevsk plant produces cars under LADA and Nissan brands.
Today LADA is represented by 20 models and variants in the segments В, В+, SUV and LCV priced from 384 to 850 K rub in Russian Federation. The brand has an average of 20% share of the Russian passenger car market and has the largest dealership network in the country – 343 centers.