In Mother Russia, Bailout Eats You
Turns out Renault made a bit of an iffy decision to invest in the Russian company behind Lada cars. Back in 2007, they got locked in a bidding war with GM and Fiat, and ended up buying 25% of the company for $1 billion.
Today, that stake is worth about $250 million, meaning it has already been a disaster for Renault. What they did not count on is the Russian version of "bailout." Turns out thatPutin the Russian People own 25% of the company as well, and they Putin is demanding that Renault gives about $850 million in loans to Lada... or else.
In other words, in Mother Russia, the bailout comes not from the ever generous government, but from whatever foreign company had the screwed up idea to try and operate in Russia, and is now faced with the option of paying up or writing off the entire investment, and the Russian market overall.
Today, that stake is worth about $250 million, meaning it has already been a disaster for Renault. What they did not count on is the Russian version of "bailout." Turns out that
In other words, in Mother Russia, the bailout comes not from the ever generous government, but from whatever foreign company had the screwed up idea to try and operate in Russia, and is now faced with the option of paying up or writing off the entire investment, and the Russian market overall.
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