Context : The source V4332 Sgr is a red transient ( red nova ) whose eruption was observed in 1994 .
The remnant of the eruption shows a unique optical spectrum : strong emission lines of atoms and molecules superimposed on an M-type stellar spectrum .
The stellar-like remnant is not directly observable , however .
It is presumably embedded in a disc-like dusty envelope seen almost face-on .
The observed optical spectrum is assumed to result from interactions of the central-star radiation with dust and gas in the disc and outflows initiated in 1994 .

Aims : We aim at studying the optical spectrum of the object in great detail to better understand the origin of the spectrum and the nature of the object .

Methods : We reduced and measured a high-resolution ( R \simeq 40 000 ) spectrum of V4332 Sgr obtained with VLT/UVES in April/May 2005 .
The spectrum comes from the ESO archives and is the best quality spectrum of the object ever obtained .

Results : We identified and measured over 200 emission features belonging to 11 elements and 6 molecules .
The continuous , stellar-like component can be classified as \sim M3 .
The radial velocity of the object is \sim - 75 km s ^ { -1 } as derived from narrow atomic emission lines .
The interstellar reddening was estimated to be 0.35 \leq E _ { B - V } \leq 0.75 .
From radial velocities of interstellar absorption features in the Na I D lines , we estimated a lower limit of \sim 5.5 kpc to the distance of V4332 Sgr .
When compared to spectroscopic observations obtained in 2009 , the spectrum of V4332 Sgr considerably evolved between 2005 and 2009 .
The object significantly faded in the optical ( by \sim 2 mag in the V band ) , which resulted from cooling of the main remnant by 300–350 K , corresponding to its spectral-type change from M3 to M5-6 .
The object increased in luminosity by \sim 50 % , however , implying a significant expansion of its dimensions .
Most of the emission features seen in 2005 significantly faded or even disappeared from the spectrum of V4332 Sgr in 2009 .
These resulted from fading of the optical central-star radiation and a decrease of the optical thickness of the cirumstellar matter , presumably due to its expansion .
V4332 Sgr bears several resemblances to V1309 Sco , which erupted in 2008 .
This can indicate a similar nature of the eruptions of the two objects .
The outburst resulted from merger of a contact binary in V1309 Sco .

Conclusions :