The Ministry of Finance commented on the decision of Fortum to write off Russian assets for 1.7 billion euros

The Federal Property Management Agency has complied with a presidential decree on the transfer of assets of foreign companies in the Russian Federation under temporary management. This was stated by Deputy Finance Minister Alexei Moiseev.

This is how the Deputy Minister commented on the information about the write-off of assets in the Russian Federation for 1.7 billion euros by the Finnish concern Fortum.

“What should have been done in the decree [по передаче активов], everything was done. If the president makes some other decisions on this matter and, accordingly, gives some other instructions, they will be executed in the same way, ”said Moiseev (quote according to TASS). He also stressed that other foreign companies also transferred their assets.

Today, May 11, Fortum reported on the write-off of Russian assets for 1.7 billion euros. The company clarified that investments in the Russian business amounted to about 6 billion euros, taking into account the purchase of shares. EBITDA of the regional segment since 2008 has been fixed at over 4 billion euros. According to Fortum’s calculations, the net cash loss from investments in Russia, acquisitions of enterprises and dividends reached 2 billion euros.

At the same time, Fortum President and CEO Markus Rauramo on a teleconference with investors spoke against the decision of the Russian authorities and stated that the corporation still allows the sale of its business in Russia, but this process was complicated by a change in management.

On April 25, Russian President Vladimir Putin signed a decree on a mechanism for introducing temporary management of foreign assets in Russia. According to the document, temporary management of the Federal Property Management Agency was introduced in relation to the Russian subsidiaries of the large energy companies Fortum (Finland) and Unipro (Germany). Fortum disagreed with this decision and stated its intention to take “necessary measures to protect its rights within the framework of relevant international law.”

After the introduction of external management, Unipro and Fortum promptly changed management. The Board of Directors of Fortum decided to appoint the new CEO of the chief power engineer of Bashneft-Dobycha (part of theRosneft”) Vyacheslav Kozhevnikov. Vasily Nikonov, head of the energy department of Rosneft, became the acting general director of Unipro.