Tatneft gains Russian government’s approval to buy Nokian Tyres operations
14 Mar 2023
But “uncertainties still remain related to the transaction and the timing…”
Nokia, Finland – Russian government officials have approved the previously announced purchase of Nokian Tyres plc’s operations in Russia by local energy major PJSC Tatneft.
The deal is in line with the total permissible transaction price of RUB23,050 million set by the Russia’s ‘commission for monitoring foreign investments’, said Nokian – citing information from Tatneft.
The actual exchange rate to Euro will be determined by the Russian Central Bank on the day of payment, the company statement added.
Based on benchmark exchange rate on 13 March, the price approved by the Russian governmental would be €286 million, as opposed to the original transaction price of €400 million announced late October last year.
“Substantial uncertainties still remain related to the transaction and the timing of it as well as the RUB/EUR exchange rate on the day of payment,” cautioned Nokian.
Completion of the transaction, it added, is subject to the completion of compliance checks against the recent changes in sanctions and money transfer, among other matters.
Nokian Tyres has been operating in Russia since 2005. In 2021, 80% of the company’s passenger car tires were produced in Vsevolozhsk, Russia and the Russia-Asia business area represented 20% of the company’s net sales.
In June last year, the Finnish tire maker announced plans for a controlled exit from Russia, as the war on Ukraine and its subsequent sanctions made it no longer “feasible or sustainable” to continue activities in the country.
Nokian has valued its assets in Russia and Belarus, excluding tax and financial items, at €574.5 million, after the impairments and the write-down at the end of the second quarter and at €590.4 million at the end of the third quarter of 2022.