OREANDA-NEWS. September 30, 2009. Finance Minister of Russian Federation Alexei Kudrin believes that the state could increase holdings in car makers and manufacturers of weapons and military equipment. However, further state support of distressed giant AvtoVAZ, if possible, should be pegged to the restructuring of the company posting huge losses. “I do not rule out that the state could increase holdings in distressed companies in the automobile and defense sectors”, Kudrin said without specifying which companies he means.

He stressed that this will be a temporary measure and increasing a stake for a year or two could be at issue. The minister went on to say that overall, the state intends to reduce holdings in companies in several years, after the crisis. A stake in AvtoVAZ could be assigned to the state or state-run banks for debt, said Economic Development Minister Elvira Nabiullina. “When the debt issue (of AvtoVAZ) is addressed, debt capitalization (into shares) is considered as an option”, she said and added that if this is the case, a stake in the company could go to “the state and possibly to banks with state participation”.