According to sources, Western companies looking to leave Russia are facing increased costs as Moscow is demanding larger discounts on the assets they want to sell. This has resulted in companies incurring losses of over $80 billion from their Russian operations due to write-downs and lost revenue. The Russian government has reportedly mandated a 50% discount on all foreign deals, as well as a contribution of at least 10% of the price to the Russian budget. Some deals are even facing additional demands for discounts before they can be approved by the government.
The Russian Finance Ministry has responded to these claims, stating that it does not force final sales prices to be cut. Instead, it may adjust valuations during the sales process if it deems that the market value of the foreign business has been incorrectly assessed. The ministry emphasized that any changes to the price will only occur if the commission overseeing the deal identifies an inaccurate valuation.
Apart from the Russian Finance Ministry, the country’s economic ministry and central bank are also involved in assessing businesses and may make corrections to the price. This suggests that multiple government entities are actively participating in the selling process and exerting their influence on the final valuations.
Aleksey Kupriyanov from Aspring Capital, a company that has provided advice on numerous deals, stated that the exodus of Western companies from Russia has benefited Russian entrepreneurs, as well as the rivals and former business partners of these Western firms. This corporate exodus has been attributed to the military operation in Ukraine initiated by Moscow, which led to the imposition of sanctions on Russia. Consequently, over 1,000 Western firms left the Russian market. As a result, Russia had to shift its focus towards non-Western partners, particularly China and India.
The impact of these requirements and demands on Western companies leaving Russia is significant. It not only burdens them with larger financial losses but also affects their ability to finalize deals and exit the country. The involvement of multiple government entities in the sales process raises questions about the transparency and fairness of the valuation process.
In conclusion, Western companies exiting Russia are facing increased costs due to Moscow’s demand for larger discounts on their assets. The losses incurred by these companies amount to over $80 billion. The Russian government has mandated a 50% discount on all foreign deals, as well as a contribution of at least 10% of the price to the Russian budget. The involvement of multiple government entities in the sales process further complicates the situation for these companies. This corporate exodus has had consequences for both Western companies and the Russian market, prompting Russia to seek partnerships with non-Western countries.