Nissan takes $687 mln loss as sells Russian business for 1 euro

  • Sale to the Russian state-owned company NAMI
  • Nissan has the right to buy back the business within six years
  • Renault sees a €331 million loss in H2 net income from the move

TOKYO, Oct 11 (Reuters) – Nissan Motor Co Ltd (7201.T) will hand over its business in Russia to a state-owned company for 1 euro ($0.97), it said on Tuesday, including a A global company has lost about $687 million in its recent costly exit from the country.

The Japanese automaker is transferring its stake in Nissan Manufacturing Russia LLC to state-owned NAMI, it said. The deal gives Nissan the right to buy back the business within six years, Russia’s Industry and Trade Ministry said.

The deal makes Nissan the latest major company to leave Russia since Moscow sent tens of thousands of troops to Ukraine in February. It also reflects a move by Nissan’s main shareholder, French automaker Renault (RENA.PA), which sold its majority stake in Russian automaker Avtovaz (AVAZI_p.MM) to a Russian investor in May.

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The sale to NAMI will include Nissan’s manufacturing and research facilities in St. Petersburg and the sales and marketing center in Moscow, the ministry said.

Nissan said it expects an extraordinary loss of around 100 billion yen ($687 million) but maintained its earnings guidance for the fiscal year ended March.

Renault, which owns 43% of Nissan, estimated that its Japanese partner’s decision would result in a €331 million drop in net profit for the second half of 2022.

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Nissan suspended production at its St. Petersburg plant in March due to supply chain disruptions. Since then, the company and its local unit have been monitoring the situation, it said. But there is “no prospect” of a change in the external environment, Nissan said, prompting the company to decide to exit.

Junior alliance partner Mitsubishi Motors Corp (7211.T) is also considering an exit from Russia, according to the Nikkei newspaper. A Mitsubishi spokesman said nothing had been decided.

The exit comes as Nissan embarked on a major shift in its relationship with Renault. The two said Monday they were in talks about the future of their alliance, including Nissan considering investing in a new Renault electric vehicle venture.

Those talks, which could trigger the biggest reset in the alliance since longtime manager Carlos Ghosn was arrested in 2018, also included the possibility of Renault selling part of its controlling stake in Nissan, two people with knowledge of the talks told Reuters.

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Renault reportedly sold its stake in Avtovaz for one ruble ($0.02).

The Nissan deal is “of great importance to the industry,” Russia’s Industry and Trade Minister Denis Manturov said in a statement.

($1 = 145.6200 yen)

($1 = 63.8500 rubles)

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Reporting by Gleb Stolyarov, Caleb Davis and Satoshi Sugiyama; writing by Alexander Marrow and David Dolan; Edited by Louise Heavens and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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