Russia okays disposal of Volkswagen assets for US$140 million- report
There is no clarity on whether Volkswagen's transaction carries a buyback clause.
The Russian state has okayed a transaction for Volkswagen to dispose of its Russian assets for US$ 140 million (Euro 125 million) to Avilon, Reuters reported citing Interfax news agency.
If this does go through, Volkswagen will work against the usual trend where most other auto firms have sold their assets for a small fee back to the country, albeit with buyback clauses, keeping open an option to return in the future. There is no clarity on whether Volkswagen's transaction carries a buyback clause, the newswire stated.
Asset disposals by firms that the country calls 'unfriendly', essentially which have put sanctions on Russia, need a go ahead from the government commission which closely tracks foreign investment, Reuters reported. Interfax stated that the Euro 125 million price was decided on April 17, Reuters stated.
The deal got stamp of approval from the country's industry Ministry on Monday, the newswire stated. At the moment, Volkswagen is in the midst of selling shares to a Russian investor, it said, refusing to divulve any further information, the news wire reported. A person in the know said that the deal could be sealed as early as this week. The source stated that the purchaser was avilon and that the Euro 125 million sum was was roughly on mark, adding that the disposal encompassed the Kaluga plant, import activities, the financial and spare part units of business.
Avilon refrained from clarifying, the newswire stated. The Kaluga factory was opened in 2007 by Volkswagen, has been furloughed since 2022, due to sanctions on the back of Russia Ukraine conflict, which caused disruption of supply chains.
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