Leasing is merged and absorbed – Newspaper Kommersant No. 17 (7462) of 01/31/2023

The redistribution of assets is activated in Russian leasing. According to Kommersant, major domestic players are interested in buying companies with foreign capital, such as John Deere Financial, Deutsche Leasing Vostok and Scania Leasing. But the deals are moving slowly as they are fraught with legal difficulties due to the need to comply with both Western and Russian restrictions.

Kommersant has learned that participants in the Russian financial market are showing interest in leasing companies with foreign capital. Interlocutors of Kommersant in the industry say that Uralsib is especially active in this direction (its group includes Interleasing) and Expobank (named among the contenders for the leasing company Siemens Finance, see Kommersant dated August 18 2022). In addition, the Insight investment group (acquired by Siemens Finance last autumn) is participating in some negotiations, its representative confirmed.

According to two Kommersant sources, “the most attractive for acquisition” are John Deere Financial (specializes in agricultural and logging equipment), Deutsche Leasing Vostok (construction and special equipment) and Scania Leasing (trucks). Kommersant’s interlocutors estimate the total cost of possible deals at the level of up to 40 billion rubles.

At Expobank, John Deere Financial, Deutsche Leasing Vostok and Scania Leasing did not respond to Kommersant’s inquiries. Uralsib reported that “the bank does not plan to conduct transactions in the leasing market.” All captive foreign leasing companies have long stopped entering into new transactions (see Kommersant dated March 8, 2022), they are actively looking for opportunities to sell their business and leave Russia, a Kommersant source in the market emphasizes.

“We are interested in leasing companies, but not all in a row and not at any price,” the Insight group emphasizes, “we carefully look at offers.” According to Evgeny Penkin, director of Salyut Adviser, the level of expected profitability “does not always satisfy the buyer”, however, leasing companies with foreign capital “have some advantage”. According to him, investors are primarily interested in buying assets that can generate a stable cash flow, and “foreign leasing companies compare favorably in this parameter, so there is competition for them in the market.”

In addition, according to Zoya Sovetkina, director of banking ratings at Expert RA, these companies “have well-established risk management systems and business processes, as well as teams of specialists with good experience and competencies in transactions with special equipment.” In addition, the expert adds, we are talking about “buying a base that has a significant proportion of repeat customers with good payment discipline.”

An additional incentive to buy foreign players stuck in the country who “for political or other non-market reasons” refused to work in Russia may be the hope that parallel import mechanisms and supply chains will be optimized, or alternative products with similar characteristics will be found, the Deputy Director believes group of ratings of financial institutions ACRA Suren Asaturov.

But when planning such transactions, it is necessary to take into account both the requirements of the sanctions legislation of Western jurisdictions and the restrictions caused by the use of retaliatory Russian measures, emphasizes Anton Imennov, Senior Partner at Pen & Paper. “Failure to comply with the requirements of Russian law may also entail the nullity of the transaction within the framework of civil law consequences,” the lawyer explains. “In the United States, the European Union, Great Britain and other jurisdictions, both administrative and criminal liability is provided for violation of the sanctions regime.”

Polina Trifonova, Olga Nikitina