Business

Renault sells Russia business and stake in Lada maker for 2 roubles

Renault is selling all its Russian operations including its holding in the manufacturer Lada Abtubaz for 2 rubles, in one of the most significant withdrawals of a foreign company since the invasion of Ukraine.

The departure of the French group, which involves a reduction in value of 2.2 billion euros and the sale of its business in Russia to a state-supported group and the Moscow municipality, highlights the lack of options for Businesses trying to leave the country Without huge losses on their investments.

CEO Luca de Miao told FT last week that the decision to leave Russia was “painful”, but the company “had to decide” that it had failed to build cars in the country.

Renault employed 45,000 workers in Russia, mostly in Abtubaz’s huge Togliati plant on the banks of the Volga River. It was more exposed than its rivals to the state and a shortage of parts had already led to the cessation of activity.

De Miao told FT The future of the car summit Last week the business “is considering a solution that will allow [people] To keep their jobs in the future. “

The transaction includes the transfer of the company’s full share in its operations in Brno Russia to the Moscow municipality and the 67.69% holding in Autobase to NAMI, a state-researched vehicle research institute.

The sale, which also gives Renault an option to repurchase the business for 6 years, closed for one ruble per share, according to a person with knowledge of the deal. At current exchange rates, there are 64 rubles per dollar.

Renault is 15% owned by the French state. If the company had not left Russia, “its sales [there] “It would collapse and it would face huge losses for an unknown period,” said the French Ministry of Economy.

Russia accounted for about 10% of Renault’s sales and half of its operating profit.

International businesses from oil companies to banks have been trying to find a way out of Russia, and many are simply stopping operations for the time being. This approach can leave them with wage bills for employees to be paid but little or no income in the state. At the same time, there are few buyers and dealing with Russian entities that have been hit by sanctions is also causing problems.

The shell of Britain Last week he agreed To sell its retail and lubrication business in Russia to Lukoil, the first major deal in the oil and gas sector. The French bank Société Générale achieved a decrease of 3.1 billion euros by selling its Rossbank network to a group controlled by an oligarch Vladimir Putin.

McDonald’s said Monday it would sell from Russia and wanted to find one native The buyer to employ his employees.

Renault’s Russia venture was part of its strategy to expand into emerging markets. its First investment in the country in 2007 Received encouragement from Vladimir Putin.

She spent years modernizing some of Abtubaz’s facilities from the Soviet era and improving operations, and until the war hoped to expand the export of new Lada models.

Russia is about to revive the production of Moscowitz vehicles – a Soviet-era car brand that began in 1946 – to continue working at the Renault plant, Moscow Mayor Sergei Sobyanin said in a blog post. They will be manufactured together with Russian truck manufacturer Kamaz, with the help of the government to find and manufacture parts, Sobianin said.

Renault’s exit from Russia comes as the company rushes to invest in electric vehicles as manufacturers position themselves to produce cars with lower emissions.

The company has already reduced its operating profit forecast for 2022 to 3% from 4% and it adhered to its financial guidelines on Monday.

Another report by Nastasia Asterschauskaya in Riga

Renault sells Russia business and stake in Lada maker for 2 roubles Source link Renault sells Russia business and stake in Lada maker for 2 roubles

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