Individuals familiar with the matter informed that several foreign companies seeking to withdraw from Russia are encountering substantial cost hikes as Moscow insists on larger reductions in the asset prices they intend to sell, Reuters reports.
As Western companies began departing Russia shortly after Moscow initiated what it terms a "special military operation" in Ukraine in February 2022, the exit requirements have progressively tightened. Navigating these regulations is becoming increasingly intricate, as per the executives. These foreign companies have already borne losses exceeding $80bn from their Russian ventures due to write-offs and decreased revenue, as indicated by Reuters' analysis of company disclosures and statements.
The Dutch brewing company Heineken announced on August 25 that it had concluded its departure from Russia by selling its Russian operations to the Arnest Group for a nominal sum of 1€.
Moscow has gradually imposed more exit obstacles. The specter of nationalization also looms, particularly following the confiscation of assets in July from Danish brewer Carlsberg and French yogurt manufacturer Danone. Companies presently in the midst of negotiating their exits encompass telecommunications group Veon, Nasdaq-listed technology group Yandex, and Italian bank Intesa.
Already, Moscow stipulates a 50% reduction on all foreign transactions once consultants appointed by the Russian government assess the business's value. Additionally, Russia mandates a contribution to the Russian budget of at least 10% of the sale price.
Nonetheless, insiders familiar with the exit process for foreign companies reveal that certain deals are encountering demands for further price reductions before the government grants approval.
Follow Daryo's official Instagram and Twitter pages to keep up to date on world news.
Comments (0)