The French group’s exit, involving a €2.2 billion writedown and sale of its businesses to a Russian state-backed body and to the City of Moscow, highlights the meagre options facing businesses trying to leave the country without huge losses on their investments.had been “painful”, but that the company was “forced to decide” because it was unable to build cars in the country.
Renault employed 45,000 people in Russia, mainly at Avtovaz’s vast Togliatti factory on the banks of the Volga river, and was more exposed than its rivals to the country, where a lack of parts had already ground its operations to a halt. Mr De Meo told the FT Future of the Car Summit that the business was “looking at a solution that will allow them to keep their jobs into the future without running away and abandoning the thing”.
The deal involves transferring the French carmaker’s entire stake in its Renault Russia operations to the City of Moscow and its 67.69 per cent holding in Avtovaz to NAMI, a state-backed car research institute.The sale, which also gives Renault a six-year buyback option on the businesses, was sealed for one rouble per stake, a person familiar with the deal said.
International companies in sectors from oil to banks have been trying to find a way out of Russia, with many simply suspending operations for now. That option leaves them exposed to paying employees for months, while producing little or no revenues at their Russian entities. But buyers are scarce, and dealing with sanctions-hit Russian entities also poses problems.