In response to geopolitical changes and the impact of the war in Ukraine, Hyundai Motor is strategically selling its Russian plant for a nominal amount of 7,000 roubles ($77.67). The move follows a trend among major automakers divesting from Russian assets, and Hyundai Motor anticipates a substantial financial setback with a projected loss of 287 billion won ($219.19 million) on the St. Petersburg plant, where operations ceased in March 2022.
The sale, outlined in a regulatory filing, involves a complex deal with Russia’s Art-Finance, incorporating a buyback option. The company aims to finalize the transaction by December 28, and despite receiving a total of 10,000 roubles for all its Russian assets, the move aligns with a broader trend of automakers opting for nominal fees and buyback options, potentially leaving room for future returns.
Approval from Russia’s government commission on foreign asset sales, known for requiring at least a 50% discount on such deals, has been granted. Russian Industry and Trade Minister Denis Manturov stated that Hyundai and Art-Finance are clarifying the deal’s parameters, including the buyback option.
Before the war in Ukraine, Hyundai and its affiliate Kia Corp were among the top three selling brands in Russia. However, with the global exodus of players and the emergence of Chinese brands, Hyundai Motor’s decision to sell reflects broader industry trends.
Art-Finance, the acquiring entity, is linked to Andrei Pavlovich, who previously acquired Volkswagen’s Russian assets. The auto dealer group Avilon, which supported Art-Finance in the Volkswagen deal, clarified that it is not connected to Art-Finance and AGR Automotive. The deal underscores the evolving landscape for automakers navigating geopolitical shifts and industry dynamics.
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