"We approved this deal yesterday," Igor Artemyev told journalists.
The Russian state-run Technology corporation, which includes the AvtoVAZ car plant based in the southern city of Togliatti, said in a news release later on Wednesday that the contract and a cooperation agreement with the French giant would be signed on Friday.
The price of the deal has not been disclosed. However, Sergei Chemezov, head of the Technology corporation, said earlier the stake would be sold at a price close to its market value. Experts estimate the blocking stake at around $1.3 billion.
In the first six months of 2008, the carmaker's shareholders - state arms exporter Rosoboronexport and Troika Capital Partners investment - are expected to complete procedures to end the plant's cross-ownership structure and consolidate 75% plus one share. The 25% stake will be sold to Renault from these shares. The deal is planned to be finalized in mid-2008.
Renault already owns 25% in AvtoVAZ, and will control the stake de facto after February 29.
Renault launched production of the inexpensive Renault Logan model in Russia in late 2005 at the Moscow-based Avtoframos plant, in which the Moscow city government has a stake. The French giant invested $250 million in the project and plans to invest another $150 million to double the plant's capacity, which hit 80,000 cars last year.
In 2006, AvtoVAZ received 2.5 billion rubles ($100 million) in net profit, almost 80% up on 2005. Revenue in 2006 gained 15% on 2005 to reach 152.4 billion rubles ($6.1 billion). In 2007, the company expects to earn a total of 166 billion rubles ($6.6 billion).
