Renault will transfer its 68 percent stake in AvtoVAZ to a Russian science institute for a nominal sum, Interfax cited Russian Trade Minister Denis Manturov as saying on Tuesday.
Renault will have the right to buy the stake back within the next five to six years, Interfax added, citing Manturov.
He also said that Renault’s stake in its Moscow plant would be passed to the city’s local government.
Renault, the Western carmaker most exposed to the Russian market, said last month it would suspend operations at the plant amid mounting pressure over its continued presence there since the country invaded Ukraine.
Renault builds three models based on the Dacia Duster platform at the Moscow plant.
AvtoVAZ builds Lada cars, Russia’s top-selling brand, at its own factories and has about 22 percent of the local market.
Renault valued its business in Russia at 2.2 billion euros ($2.4 billion) at the end of last year. The company got about 10 percent of its revenue from Russia last year.
Renault first acquired a 25 percent share in AvtoVAZ in 2008 at a cost of more than $1 billion and gradually increased its stake, fully consolidating AvtoVAZ into its balance sheet in 2017. It invested heavily to modernize the vast Togliatti factory and update Lada’s bare-bones models.
Bloomberg contributed to this report