The fallout from Russian President Vladimir Putin’s decision to attack Ukraine is not over. The exodus of brands from all kinds of industries leaving Russian soil continues strongly. In the automotive sector, Renault suspended operations at its two plants due to difficulties in receiving components and is now seeking a definitive exit from the country.
This Monday, the Renault Group Board of Directors reported that it unanimously approved the signing of agreements to sell 100 percent of the Group’s shares in Renault Russia to the Moscow city entity and its 67.69 percent stake in AVTOVAZ to NAMI (the Central Automobile and Motor Research and Development Institute).
According to the company, the closing of these transactions is not subject to any conditions and all required approvals have been obtained. The agreement provides for an option for Groupe Renault to repurchase its stake in AVTOVAZ, exercisable at certain times during the next 6 years.
“Today we have made a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, preserving the Group’s performance and our ability to return to the country in the future, in a different context. We are confident in Groupe Renault’s ability to further accelerate its transformation and exceed its medium-term targets ,” said Luca de Meo, Groupe Renault CEO.
As announced on March 23, the French firm explained that “in the results of the first half of 2022, a non-monetary adjustment charge must be recorded for the book value of the consolidated intangible assets, property, plant and equipment and the mutual fund. Group trade in Russia. As of December 31, 2021, this value amounts to 2,195 million euros.
“Consequently,” he added, “the Russian operations will be deconsolidated in the Renault Group’s consolidated financial statements for the six-month period ended June 30, 2022 and will be accounted for as discontinued operations in application of the requirements of IFRS 5” .
Other companies in the automotive industry that have done the same are: Mercedes-Benz Trucks and Buses, Volvo Trucks, Volkswagen Group, Ford, Stellantis, Toyota and Nissan.