Russia’s government has approved a deal for Volkswagen to sell its Russian assets to auto dealer group Avilon for up to 125 million euros ($137.6 million), the Interfax news agency reported on Tuesday, citing a source.
Should Volkswagen extract money from Russia while exiting, it would buck the trend of other major automakers, most of which have sold their assets in Russia for a nominal fee, but inserted buyback clauses that could one day allow them to return.
It was unclear whether Volkswagen’s deal would include a buyback clause.
Asset sales by companies from “unfriendly” countries, as Russia labels those that have imposed sanctions on it, require approval from a Russian government commission that monitors foreign investment.
Interfax, citing a source familiar with the commission’s decision, said the 125-million-euro price was agreed on April 17. Russia’s industry and trade ministry approved the deal on Monday.
“Currently Volkswagen AG is in the process of selling its shares of Volkswagen Group Rus, and thereby also the Kaluga plant with its more than 4,000 employees, to a reputable Russian investor,” Volkswagen said, declining to comment further.
A person with knowledge of the process told Reuters the transaction was nearing completion and closing should be published this week.
The buyer is Avilon together with a financial investor, the person said, and the 125-million-euro sum quoted by Interfax was approximately right.
The sale includes the plant in Kaluga, the import activities as well as spare part business and the financial business, the source added.
Avilon declined to comment.
Volkswagen opened the Kaluga factory, which has a capacity of 225,000 vehicles a year, in 2007. The plant has been furloughed since March 2022, when sanctions imposed by Western countries over the conflict in Ukraine led supply chains to break down.
France’s Renault sold its majority stake in Russia’s Avtovaz for reportedly one rouble, but with a six-year option to buy it back. Japan’s Nissan handed over its business in Russia to a state-owned entity for one euro.
Source: Reuters.com