Moscow should take over Russian assets of Finland’s Fortum, VTB CEO says

Moscow — Russia should consider taking over and managing the assets of foreign companies such as Fortum in Russia, returning them only when sanctions are lifted, Andrei Kostin, the CEO of state-owned bank VTB, said on Monday.

The Finnish utility said in May 2022 it would “pursue a controlled exit” as it joined the many companies seeking to leave after Russia sent troops into Ukraine in February that year.

Fortum, which recorded total impairment charges of €1.7bn ($1.87bn) related to its Russian operations, said the process of exiting Russia continued and the sale of its operations remained a priority, but gave no further details.

The company is majority-owned by Finland, which joined Nato early in April. Moscow said Finland had made a dangerous mistake.

Kostin said Russia needed to attract as much private money as possible and could offer non-controlling stakes in large state entities as part of a privatisation drive.

Kostin said Russia should consider taking over foreign companies’ assets, which he said would mirror restrictions imposed on Russian assets abroad.

VTB was forced to shutter its European operations as sanctions were imposed.

“We were told that (our German subsidiary) no longer had the right to operate,” Kostin said. He said the unit was put into administration, with its assets to be sold and anything left to be frozen until sanctions are removed.

Citing the example of Fortum, he asked: “Why not, say, take it over?”, adding that a managerial company such as Inter Rao could manage it and pay the Russian government money.

“And when the sanctions are over, we will give it back to them. It’s only fair,” he said.

Inter Rao declined to comment.

Asset sales by investors from “unfriendly” countries — as Moscow terms those that imposed sanctions against Russia — require approval from a government commission and, in some cases, the president.

In its report on 2022 financials, Fortum said being unable to finalise its divestment may limit the company’s access to capital markets and flagged expropriation risks.

“The transaction may materialise at a lower valuation of the business or, in extreme case, expropriation of Fortum’s Russian assets,” Fortum said

Reuters