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AvtoVAZ's acquisition of a license for engine production from French-based Renault should improve consumer appeal for the new power units by making them more reliable and low-consumption, which in turn should help the company attract new customers in the future.
AvtoVAZ plans to sign a contract with Renault for the acquisition of a license for producing 1.4L and 1.6L engines, reported Vedomosti with reference to AvtoVAZ president, Boris Alyoshin. The relevant agreement is to be approved by a company EGM scheduled for September 5. The transaction cost has not been disclosed.
The acquisition of the license should have a positive impact on the plant's development, since the company will be able to install more state-of-the-art, low-consumption and reliable power units both on the models produced on the Renault chassis and on certain older models. This should boost the company's sales and improve its customer base.
In line with our estimates, the fair value of AvtoVAZ commons is USD 1.5 per share, which implies an 8.1% downside and corresponds to a SELL recommendation. The fair value of the company's preferred shares is USD 0.75 per share, which implies a 23.8% upside and corresponds to a BUY recommendation. Konstantin Romanov
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AvtoVAZ
Capitalization: $659 988 732,00
Common shares:
Price: $0,23
Delta week: -1,0%
Delta month: -16,8%
Delta year: -85,5%
Preferred shares:
Price: $0,072
Delta week: -0,5%
Delta month: -38,0%
Delta year: -86,8%
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0.569
0.073
