Russia approves sale of Volkswagen assets for up to €125m
Most other major vehicle makers have sold their assets in Russia for a nominal fee, but have inserted buyback clauses
16 May 2023 - 16:26
byAgency Staff
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Moscow — Russia’s government has approved a deal for Volkswagen to sell its Russian assets to autodealer group Avilon for up to €125m, the Interfax news agency reported on Tuesday, citing a source.
Should Volkswagen extract money from Russia while exiting, it would buck the trend of other major vehicle makers, most of which have sold their assets in Russia for a nominal fee, but inserted buyback clauses that could one day allow them to return.
It was unclear whether Volkswagen’s deal would include a buyback clause.
Asset sales by companies from “unfriendly” countries, as Russia labels those that have imposed sanctions on it, require approval from a Russian government commission that monitors foreign investment.
Interfax, citing a source familiar with the commission's decision, said the €125m price was agreed on on April 17. Russia’s industry and trade ministry approved the deal on Monday.
“Currently Volkswagen is in the process of selling its shares of Volkswagen Group Rus, and thereby also the Kaluga plant with its more than 4,000 employees, to a reputable Russian investor,” Volkswagen said, declining to comment further.
A person with knowledge of the process said the transaction was nearing completion and closing should be published this week.
The buyer is Avilon together with a financial investor, the person said, and the €125m sum quoted by Interfax was approximately right. The sale includes the plant in Kaluga, the import activities as well as spare part business and the financial business, the source added.
Avilon declined to comment.
Volkswagen opened the Kaluga factory, which has a capacity of 225,000 vehicles a year, in 2007. The plant has been furloughed since March 2022, when sanctions imposed by Western countries over the conflict in Ukraine led supply chains to break down.
France’s Renault sold its majority stake in Russia’s Avtovaz for reportedly one rouble, but with a six-year option to buy it back. Japan’s Nissan handed over its business in Russia to a state-owned entity for €1.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Russia approves sale of Volkswagen assets for up to €125m
Most other major vehicle makers have sold their assets in Russia for a nominal fee, but have inserted buyback clauses
Moscow — Russia’s government has approved a deal for Volkswagen to sell its Russian assets to autodealer group Avilon for up to €125m, the Interfax news agency reported on Tuesday, citing a source.
Should Volkswagen extract money from Russia while exiting, it would buck the trend of other major vehicle makers, most of which have sold their assets in Russia for a nominal fee, but inserted buyback clauses that could one day allow them to return.
It was unclear whether Volkswagen’s deal would include a buyback clause.
Asset sales by companies from “unfriendly” countries, as Russia labels those that have imposed sanctions on it, require approval from a Russian government commission that monitors foreign investment.
Interfax, citing a source familiar with the commission's decision, said the €125m price was agreed on on April 17. Russia’s industry and trade ministry approved the deal on Monday.
“Currently Volkswagen is in the process of selling its shares of Volkswagen Group Rus, and thereby also the Kaluga plant with its more than 4,000 employees, to a reputable Russian investor,” Volkswagen said, declining to comment further.
A person with knowledge of the process said the transaction was nearing completion and closing should be published this week.
The buyer is Avilon together with a financial investor, the person said, and the €125m sum quoted by Interfax was approximately right. The sale includes the plant in Kaluga, the import activities as well as spare part business and the financial business, the source added.
Avilon declined to comment.
Volkswagen opened the Kaluga factory, which has a capacity of 225,000 vehicles a year, in 2007. The plant has been furloughed since March 2022, when sanctions imposed by Western countries over the conflict in Ukraine led supply chains to break down.
France’s Renault sold its majority stake in Russia’s Avtovaz for reportedly one rouble, but with a six-year option to buy it back. Japan’s Nissan handed over its business in Russia to a state-owned entity for €1.
Reuters
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