Western firms face £93 billion losses as Russia seizes assets
Following Russia's invasion of Ukraine, several enterprises from Europe and the USA opted to leave the Russian market. The latest analysis by Reuters indicates that due to these decisions, these companies faced financial losses close to £93 billion, an amount that was seized by the Russian authorities. Additionally, the scenario was exacerbated by unwelcome decisions from Moscow's authorities, who severed ties with the West.
After the strike on Ukraine, some Western businesses operating in the Russian market chose to halt their operations there. In certain instances, directives from Moscow forced companies to dispose of assets at greatly reduced prices.
The latest findings from Reuters reveal that by the start of 2024, Western corporations exiting the Russian market had incurred total losses of about £93 billion. This money was appropriated by the Russians.
Reuters reports that in the context of Western companies pulling out of Russia, the local government levied steep financial demands on them.
According to the agency, "an enterprise that was offloading its assets was compelled to do so at a no less than 50 per cent markdown. Practically, this led to situations of abandoning factories or stores along with equipment for a "symbolic ruble." Among those affected was, for example, the French car brand Renault.
The most substantial markdowns were witnessed by companies like Shell and the Russian enterprise Polymetal, which had Western shareholders in its leadership.
However, many Western companies chose not to exit the Russian market. Examples include, but are not limited to, Auchan and Nestle. The so-called "list of shame" compiled by professors from an American university at Yale continues to feature dozens of enterprises from Western Europe and the USA.
The Reuters agency highlights that as a result of withdrawing from the Russian market, companies are set to add billions of dollars to their sum of losses.
One of the most severe steps taken by the Russian authorities in this regard is the temporary acquisition of Western businesses. This occurred, for instance, with Carlsberg.
