Hyundai Motor to take $219 million hit on sale of Russian plant
Reuters
Published Dec 19, 2023 08:07
Updated Dec 19, 2023 16:41
SEOUL (Reuters) -South Korea's Hyundai Motor plans to sell its plant in Russia for a nominal 7,000 roubles ($77.67), a company official said on Tuesday, making it the latest global automaker to sell Russian assets since the outbreak of the war in Ukraine.
Hyundai Motor, in a regulatory filing, said it would take a 287 billion won ($219.19 million) loss on selling the plant, in which operations have been suspended since March 2022.
The company said it was seeking to transfer its assets in the plant in St. Petersburg to Russia's Art-Finance and include a buyback option, adding that it plans to complete the deal by Dec. 28.
A Hyundai Motor official said it would receive 10,000 roubles in total for the sale of all its Russian assets.
Russia's government commission on foreign asset sales, which demands discounts of at least 50% on deals involving departing companies, has approved the deal, the RIA news agency cited Russian Industry and Trade Minister Denis Manturov as saying.
"Hyundai and Art-Finance are clarifying the parameters of the deal, including the buyback option," RIA quoted him as saying.
Hyundai and its affiliate Kia Corp were among the top three selling brands in Russia before the war. Since then global players have pulled out with Chinese brands moving in to replace them.
Hyundai Motor is following other major automakers that have sold their assets in Russia for a nominal fee and included buyback options that could one day allow them to return.
Art-Finance is owned by Andrei Pavlovich, who acquired Volkswagen (ETR:VOWG_p)'s Russian assets in May, said AGR Automotive, which the German carmaker's factory was renamed to.
Autodealer group Avilon had supported Art-Finance on the Volkswagen deal. Pavlovich is the former head of Avilon, but Avilon said it is not linked to Art-Finance and AGR Automotive.
($1 = 90.1300 roubles)
($1 = 1,309.3600 won)
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Written By: Reuters
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