Russian authorities demand additional discounts from companies leaving the country – Kommersant

The Russian authorities demand an increase in discounts for the sale of assets of foreign companies leaving the Russian market, writes Reuters citing three sources. According to the agency, Western companies lost about $80 billion due to lost profits from the sale of their assets in Russia.

According to the legislation, a 50% discount is set for the sale of foreign business in Russia. At least 10% of the transaction price goes to the Russian budget. According to Reuters sources, some companies are being asked for additional discounts in order for the government’s Foreign Investment Control Commission to approve the deal.

The Russian Ministry of Finance, in response to a request from Reuters, said that the size of the discount could change if the commission establishes a discrepancy between the declared amount of the transaction and the market value of foreign assets. The department noted that they have the right to “adjust” the final cost.

A Reuters source in the financial market, who works with companies leaving the Russian market, said that a government commission withdrew some transactions, demanding a reduction in cost by 20-30%. Another agency source noted a high risk of commission rejection of transactions exceeding $100 million.

The rule according to which transactions of companies from unfriendly countries must be coordinated by a special commission was established in March 2022. When sales assets with a discount below 90%, non-residents must contribute to the RF budget at least 5% of their market value. If the discount exceeds 90%, then the contribution must be at least 10%.

Lusine Balasyan