Equity partners Renault and Nissan will form a joint venture with state-controlled Russian Technologies that gives the two auto makers an indirect majority stake in AvtoVAZ.

The non-binding memorandum of understanding signed in Paris calls for Renault-Nissan and Russian Technologies to contribute their stakes in AvtoVAZ to the new joint venture that will control the Russian car maker and its Lada brand.

The deal will see the Renault-Nissan Alliance invest $750 million, which will give it a 67.13% stake in the JV in mid-2014. The JV then will control 74.5% of AvtoVAZ.

Renault purchased 25% of AvtoVAZ in 2008. Its share of the new capital is $300 million. Nissan, which doesn’t own a stake in the Russian auto maker, will chip in the remaining $450 million.

Russian Technologies will restructure some outstanding loans with AvtoVAZ, and the auto maker is expected to raise RR7 billion ($238 million) in the sale of some non-core assets in order to pay down some of the Russian Technologies loans.

The balance, some RR46 billion ($1.56 billion) in loans will be extended interest-free “well beyond its current maturity date,” the partners say in a release, providing AvtoVAZ with a “strong balance sheet with no liquidity constraints.”

Renault-Nissan and AvtoVAZ recently launched joint production of the first Lada model based on a Renault platform. AvtoVAZ’s Togliatti plant is expected eventually to produce up to 350,000 vehicles annually based on the Renault/Dacia Logan platform.

The facility is scheduled to launch output of the new Nissan Almera sedan in November, and two Renault models will be added in 2013.