- Extensive Western sanctions are creating a minefield for investors
- Exxon faces a “complex process” as it comes out
- SocGen warned that it could be deprived of Russian assets
- Toyota stops production, Pirelli’s Russian plants continue
- Banks report any change in the price of sanctions
March 4 – Russia has said it will block Facebook from blocking state media, and Britain’s BBC has stopped reporting in the face of a new media law as Moscow raised bets on foreign corporations on Friday over its attack on Ukraine.
Internet provider Cogent (CCOI.O) has said it will suspend services to Russia, potentially deepening the country’s isolation. Read more
Microsoft (MSFT.O) has said it is suspending sales in Russia, and video game maker Electronic Arts (EA.O), which has removed Russian teams from popular games, has said it is suspending game sales in Russia and ally Belarus. Read more
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Russia has said Meta Platform’s (FB.O) Facebook has been blocked due to restrictions on state-run channels and also blocked the websites of the BBC, Deutsche Welle and Voice of America for what it said was false information about the war in Ukraine. Read more
The BBC has said it will suspend work in Russia following the introduction of a new law that could close anyone found to be deliberately spreading “fake” news. Read more
Moscow’s actions come after a week of condemnation by major global brands for the attack on Ukraine. Problems with the supply and supply chain make it difficult to work in Russia as well. Companies from Shell to Apple and Toyota have taken action from the suspension of sales and operations to full exit.
Moscow outlined options for foreign companies on Friday: staying in the country, leaving altogether or transferring their assets to local managers until they return.
First Deputy Prime Minister Andrei Belousov described the alternatives in a statement.
“The company continues to operate fully in Russia,” he said in a statement. “Foreign shareholders are transferring their stake to be managed by Russian partners and may return to the market later,” he added: “The company is closing down in Russia, closing production and laying off employees.”
No route comes without risks. Those who remain may face a backlash in Western markets, where the public has united for the cause of Ukraine, those who transfer shares may hand over the keys with little security, while those who give up may face big loss at best or you may have to sell for a face value amount
“It’s a complex process,” said Darren Woods, chief executive of energy giant Exxon Mobil (XOM.N), which is abandoning oil and gas investments involving partnerships with Russia’s Rosneft and others worth $ 4 billion. Read more
The companies had little time to prepare.
Russia’s invasion – what Moscow calls a “special operation” – has prompted the United States and Europe to impose swift and comprehensive sanctions on everything from global payment systems to a range of high-tech products. Read more
“Western companies have probably not lost so much money because of geopolitics since the Shah was overthrown in Iran,” said Renaissance Capital chief economist Charlie Robertson, referring to the Islamic revolution more than four decades ago that led to the exodus of Western countries. enterprises.
STAY IN PLACE
However, some companies plan to continue. Italian tire maker Pirelli has said it has set up a “crisis committee” to monitor developments, but does not expect to halt production at either of its two Russian plants.
Its competitor, Finland’s Nokian Tires, said last week that it was shifting production of some product lines outside Russia.
But there are no easy fixes even for those looking for a way out when there are limited trading counterparties.
British insurer and asset manager Royal London has said it plans to sell its Russian assets, which it says account for only about 0.1% of its portfolio. Read more
“We can’t trade these things anyway, but as soon as we can, we obviously intend to sell them,” said CEO Barry O’Dwyer.
For companies packing their luggage, Russia’s first deputy prime minister said the rapid bankruptcy plan “will support employment and the social well-being of citizens so that bona fide entrepreneurs can ensure the efficient operation of businesses.”
“EXTREME SCENARIO”
So far, global companies, banks and investors have said they have some form of exposure to Russia of more than $ 110 billion. This number may increase. Data from research firm Morningstar show an exposure from international funds of $ 60 billion in stocks and bonds. Read more
BASF (BASFn.DE), the world’s largest chemical group, said it was shutting down new businesses in Russia and Belarus, with the exception of food production for humanitarian causes. He also hinted at the minefield of the new rules imposed sanctions.
“BASF will only do business in Russia and Belarus, fulfilling existing obligations in accordance with applicable laws, regulations and international rules,” it said.
Swiss food giant Nestle (NESN.S), maker of KitKat bars and Nescafe coffee, said it was suspending advertising in Russia, while Swiss watchmaker Swatch Group said it would continue operations in Russia but suspend exports.
Deutsche Bank (DBKGn.DE) said it has tested its operations as it has a large technology center in Russia, but is confident it can run its day-to-day business worldwide.
The German lender opened a new office in Moscow in December, a move he said was a “significant investment and commitment to the Russian market”.
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Sabrina Vale in Houston; Giulio Piovacari in Milan, Toby Stirling in Amsterdam, Silke Coltrowitz in Zurich, John Reville in Zurich, Tom Sims and Frank Siebelt in Frankfurt, Richa Naidu in London; Diane Bartz in Washington; Elizabeth Culford in New York and Tiashi Date and Eva Matthews in Bangalore; Writing by Edmund Blair and Peter Henderson; Edited by Pravin Char and Nick Zieminski
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