Western business is divided in relation to Russia. Many companies flatly refuse to work in a large and promising market. But many deliberately stay – they understand that there are many applicants for occupying the vacant niche.
After all, the distraught West sometimes wants to sell off its multibillion-dollar assets in Russia for a penny.
NYT sang with senators: how American propaganda works
At least 162 large Western companies did not react in any way to the start of the special operation and the imposition of sanctions: they did not change their operating activities in Russia in any way, calculated in The New York Times.
However, some of these companies donated funds to international humanitarian organizations or announced a “reassessment” of relations with Russia, but did not take any concrete measures. At least in addition to those that were prescribed by the requirements of international sanctions.
The New York Times cites the example of the American personal care manufacturer Koch Industries, which employs more than 100,000 people worldwide.
In Russia, the company has 2 factories employing more than 600 people: Americans produce products such as Brawny paper towels, Northern and Angel Soft toilet paper, and cups. The company verbally condemned Russia, but did not close the enterprises.
Another example is the American International Paper, which has so far only announced that it is “reviewing” its 50 percent stake in the Russian timber group Ilim. True, the Americans never left the share capital.
The publication in The New York Times, of course, appeared for a reason. An influential American newspaper is trying to put pressure on businesses that have not yet broken with Russia. Moreover, journalists (and in fact, propagandists) worked in conjunction with radical politicians – immediately after the publication in The New York Times, a group of senators demanded that all American companies operating in Russia be deprived of tax benefits.
In fact, Washington has launched a fiscal war against its own businessmen.
Canadians rush to get rid of Abramovich’s former mines
Western companies, which announced their flight from Russia in February-March, then began to look at things more soberly. Rethinking their plans demanded, including the development of a federal law on nationalization.
After that, businessmen realized that leaving Russia would be more painful for them than continuing to work, despite the pressure of public opinion. The Financial Times notes that businesses in Europe and America are refusing to leave due to a lack of potential buyers, rising costs and uncertain prospects for any future return.
The French group Renault, which owns a 68% stake in AvtoVAZ, acted most pragmatically. And this is more than 40 thousand employees, 10% of the turnover of the French company and half of the operating profit. For 14 years of work on the Russian market, the French could invest about 262 billion euros in the Russian economy.
Renault is negotiating the sale of its controlling stake in AvtoVAZ to the state for a symbolic one ruble. At least, this was stated by the Minister of Industry and Trade Denis Manturov. It is important that the French automaker is ready to return to the Russian market – it can buy back its stake in 5-6 years at a fair price, taking into account any subsequent investments. Renault has so far not commented on Manturov’s statements, writes the Financial Times.
However, the situation for other Western businessmen is much more complicated. For example, Canadian Kinross Gold, which came under unprecedented pressure from the authorities, entered into a deal to transfer its Russian assets to Highland Gold, controlled by the mining magnate Vladislav Sviblov.
Sviblov himself gained control of Highland in 2020 after buying a 40% stake from the oligarch. Roman Abramovich and other investors subject to sanctions. Prior to the start of the special operation, analysts estimated the Russian assets of Kinross Gold at $1.6 billion.
The Canadians are selling the company, journalists write, much cheaper – for only $ 680 million. Moreover, the payments will be phased, the installment plan was 5 years. It will be provided with several types of guarantees at once – a pledge of shares, financial guarantees and an escrow account. As you can see, Canadians are in a hurry to get rid of the asset. One can only guess how tough the pressure of the authorities was.
How to reduce 14 billion to zero – ask Sir Sawers
The symbolic ruble that Renault is asking for the Russian auto giant is, of course, not a fair, but a politically motivated price. But other Western companies are having an even tougher time. For example, the oil giant BP intends to simply write off its 20% stake in Rosneft.
In fact, the company’s $14 billion investment will be a gift, writes The Wall Street Journal. The British bought the shares of the Russian oil giant in 2013, and already in May they are going to reflect the write-off of this financial asset in their financial statements.
The value of BP’s stake in Rosneft is already “close to zero,” said BP board member Sir John Sawers at a management get-together hosted by The Wall Street Journal.
True, Sawers admitted that he is still going to look for investors who are ready to buy this asset. He already named the price. It seems that there will be a lot of people willing to pay a sum “close to zero” on both sides of the Atlantic.