- Since the invasion in Ukraine last year companies have scrambled to cut off ties with Russia.
- An FT survey found that companies lost €100 billion attempting to leave the state.
- Putin is determined profit from the assets of outgoing companies.
European companies have lost more than €100 billion in Russia since its invasion of Ukraine, Financial Times.
Since February of last year, businesses have pulled out their operations from the state en masse in response to pressures from investors and consumers.
The FT’s analysis of 600 companies’ financial statements revealed that 176 had balance sheet losses as a consequence of the sale or closure of Russian businesses.
The majority of losses occurred in heavily exposed sectors, such as utilities and energy. Three companies – BP, Shell and TotalEnergies – faced penalties of €40.6 billion. The losses were covered by higher energy prices, which brought in bumper profits.
When energy and utilities is excluded, the biggest writedowns are in the chemical and automotive industry of Germany.
Not all companies cut ties. According to an ongoing Yale studyJust over half of the 1,000 Russian companies that had pledged to leave the country have been able to do so. Last updated on August 7, the tracker is a collection of information about Russian companies.
Nabi Abdullaev of Control Risks told the FT that companies could have made a loss by staying in Russia but they would still be at risk of much larger losses. The faster you leave, lower is your loss.”
Last month, the Kremlin seized assets belonging to Danone and Carlsberg.Experts are concerned that Vladimir Putin may make it more difficult for Russian companies to leave the country. The state is currently in the process Approving a new regulationThis puts the Kremlin in the first line of succession to seize shares from strategic companies whose owners leave the country.
This law is likely to be one of many punitive measures introduced by Putin’s regime to punish companies that want to stop operating in his nation.
In December of 2022, Russia forced companies selling assets to do so at a 50% reduction. This led to a mad rush by businessmen in Russia to get their hands on bargain-bin assets.
A number of legislative measures that have been in place for a long time has also slowed the withdrawals of companies.
