Russia: The withdrawal of Western companies continues

More than 500 companies have suspended their activities in Russia and 523 have completely withdrawn.

An additional 152 are “backward,” 177 are “time to buy,” and for 227 companies, nothing has changed, according to a database maintained by Yale University.

Dr. Jeffrey Sonnenfeld, a professor of Business Administration, and his team of researchers and students at the Yale Institute of Leadership update the database to show new company announcements as close to real-time as possible.

Over the past 15 months, the business response to Russia’s war in Ukraine has seen 330 US companies announce that they are voluntarily reducing or suspending their operations in Russia.

The most important departure

German car giant Volkswagen has sold its businesses – including its 4,000-employee factory in the city of Kaluga – to Russian carmaker Avilon Group.

BP, Exxon and Shell have said they are offering billions of dollars in Russian energy assets. “I am confident that the decisions we have made as a board are not only the right thing to do, but are in the long-term interests of BP,” said Bernard Looney, BP’s chief executive.

In the 1980s, such a widespread response by private companies contributed to the end of apartheid in South Africa.

Many are leaving Russia

Since the day of the invasion of Ukraine, more than 1,000 companies have voluntarily reduced their business with Russia to some extent – above the minimum required by law and international sanctions. A total of 1582 companies in the country, including Greece, only 227 are still operating as before. In addition, 177 get time until they make their final decisions.

If to the 1,026 companies that have left the country, we add 152 that are increasingly returning to them, we understand that the effects of the Russian invasion of Ukraine are great and the economic consequences for Russia are great.

Greece

Of the 13 Greek companies operating in Russia, 2 have left the country, 2 are still suspended, one is in the process of withdrawing and 6 are operating as before.

Other countries

The example of the United States is typical, where 330 companies have stopped or suspended their activities, out of a total of 468.

In addition, 112 out of 127 British companies withdrew or suspended their activities.

The example of France is interesting, where less than half of the companies have stopped their activities or left. In particular, out of 82 companies, only 39 have stopped or stopped their activities.

Position of the central bank of Russia

The bank downplayed the impact of a flight of Western businesses to the foreign exchange market when the ruble weakened in early April, but the Kremlin plans to introduce a monthly limit of $1 billion from June for residents to buy foreign currency to settle the contracts.

“The large amount of foreign currency purchases required to settle trade, in the context of the narrowing of the current account surplus in Russia’s balance of payments, may have a negative impact on the foreign exchange market, so buyers are advised to spread their currency foreign. buys equally.” the central bank said.

The central bank sits on the government’s foreign investment committee, which approves deals and has required exiting companies to sell assets at a discount of at least 50 percent.

The commission aims to reduce risks to financial stability by prioritizing buyers with relevant industry experience, the central bank said.

Many lenders have included buyout clauses, which the central bank said helped businesses continue to operate without disruption.

*With data from Yale School of Management and Image News

Source: Ot.gr