AvtoVAZ has spent its emergency state loanAug 13th, 2009 | By Caroline Clayfield | Category: Rouble News
Russian car manufacturer AvtoVAZ has reported that it has spent almost all of the 33 billion roubles ($1bn) it was given in state loans and bridging loans in order to pay off debts to suppliers.
Last year, the number of cars sold by ActoVAZ fell by 6 per cent. Since then, sales have continued to fall forcing it to shut down its major production plant during the month of August, sparking protests from employees.
In March, as a result of the problems, Vladimir Putin ordered the state to lend the car firm 25 billion roubles and for a further 8 billion to be provided through bridging loans from other banks.
The company announced yesterday that it had so far spent 24.3 billion, consisting of 8 billion to the bridging loans repayments, 14.02 billion to suppliers, 6.17 billion on settling accounts with suppliers and 1.63 billion on wages.
The company says 75 per cent of overdue debts have now been settled but it is still struggling with sales of its Lada model car.