Non-residents conducted about 200 transactions for the sale of assets in the Russian Federation in a year – Kommersant

For the period from March 2022 to March 2023, about 200 transactions were made to exit foreign investors from Russian assets. This is stated in the review of the financial stability of the Bank of Russia. The Central Bank participates in the consideration of applications submitted to the subcommittee of the government commission for the control of foreign investment in the Russian Federation.

“Russian consumers have been affected by the exit from the Russian market of large Western players from the catering, clothing, furniture and household goods retail trade. This, in turn, had a negative impact on the commercial real estate market. The entry of some international automobile concerns had a strong effect on the Russian market. A number of significant transactions were made in the field of mechanical engineering and the chemical industry,” the review lists.

On an economic scale, the impact of the sale of their Russian subsidiaries by foreigners is “small,” the Central Bank states. At the same time, only 20% of the total number of transactions were related to the sale of large assets by non-residents (over $100 million). “Among the deals approved since October 2022, only five involved actual payments to non-residents in excess of $400 million,” the regulator notes.

Earlier, one of the conditions for permitting such transactions with unfriendly non-residents was the obligation to voluntarily send funds to the Russian budget in the amount of at least 10% of half of the market value of assets from the valuation report. And if the sale of an asset takes place with a discount of more than 90%, then at least 10% of its market value.

As noted in the review, special attention is paid to the financing of such transactions in the context of a possible increase in the debt burden of the corporate sector and risks for banks, as well as the impact of these transactions on the volatility of the domestic foreign exchange market.

According to the audit and consulting company Kept, in 2022, a total of 686 M&A transactions were completed in Russia for a total of $60.7 billion. At the same time, according to their estimates, by the amount of transactions, 28.6% were transactions to exit the Russian business. According to the AK&M agency, in January-March of this year took place 21 transactions with Russian assets worth $2.6 billion, where the seller was foreign investors.

Olga Sherunkova