Russia Moves to Take Control of Uniper, Fortum Assets -- Update
26 April 2023 - 01:26PM
Dow Jones News
By Mauro Orru and Giulia Petroni
Russia says it has taken control of the assets of Germany's
Uniper SE and Finland's Fortum Oyj in the country, handing the
stakes in their Russian subsidiaries to a government agency.
The Federal Agency for State Property Management has taken over
Uniper's 83.73% stake and Fortum's 98.23% stake in their respective
Russian businesses, according to a decree signed Tuesday by Russian
President Vladimir Putin.
"External management is temporary and it means that the original
owner no longer has the right to make management decisions," the
agency said in a statement on Wednesday. "The external manager
receives powers that allow it to guarantee the efficiency of
businesses based on their importance for the Russian economy."
The new decree was justified by Russia as a response to the
"unfriendly actions" of the U.S. and other governments that have
imposed a barrage of crippling economic sanctions against
Moscow.
The move is one of the most drastic responses by the Kremlin so
far to the flight of Western companies from Russia in the wake of
the country's invasion of Ukraine last year.
Last summer, Russia took control of the international consortium
behind the giant Sakhalin-2 oil-and-natural-gas project in Russia's
Far East that counted the likes of Shell PLC and Mitsubishi Corp.
among its shareholders. The Kremlin has long threatened to
nationalize the assets of companies that leave Russia.
Uniper said in a statement on Wednesday that it is currently
reviewing the legal situation and that the Russian government's
move concerns a shareholding of 83.73% in Unipro, which is listed
in Russia and counts over 4,000 employees.
The German gas trader said Unipro has already been
deconsolidated from an accounting perspective since the end of last
year, but approval of the stake sale, which was submitted to
Russian authorities, hasn't been granted yet even though a contract
with a Russia buyer was signed in September 2022.
"Uniper has de facto no longer been able to exercise operational
control over Unipro since the end of 2022," the company said.
Fortum said in a statement that it hadn't received official
confirmation from Russian authorities on the temporary asset
management and that it is investigating the situation.
"Fortum's current understanding is that the new decree does not
affect the title (registered ownership) of the assets and companies
in Russia. However, it remains unclear how this affects e.g.
Fortum's Russian operations or the ongoing divestment process," the
group said.
Fortum said in May last year that it was preparing to leave the
Russian market, with potential divestments of its operations in the
country. The book value of Fortum's holdings in Russia stood at
EUR1.7 billion at the end of 2022.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
April 26, 2023 07:11 ET (11:11 GMT)
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