Exit from Russia, after that country attacked Ukraine, cost foreign companies more than $107 billion in write-offs and lost revenue, a Reuters analysis of company data showed.
The volume of losses has increased by a third since August 2023, indicating the extent of the impact of the Russian invasion on corporate finances.
“As Russian aggression continues due to inconsistent Western military aid and increasing scope of Western sanctions, companies still aiming to exit Russia are likely to face new difficulties and have to accept higher write-offs and losses,” he told Reuters. director of company data collection at consulting firm S-RM Ijan Masi.
Masi recalled that Russian President Vladimir Putin recently won the presidential election and provided a renewed mandate to continue further isolation from the West, including additional asset seizures and political pressure.
Moscow demands a discount of at least 50 percent on the sale of foreign assets and is constantly tightening its exit clauses from the Russian market, often accepting a nominal fee of as little as one ruble.
From the beginning of 2024, the sale of the assets of Shell, HSBC, Polimetal and Yandex has been announced with a total value of almost ten billion dollars and with a discount of up to 90 percent, according to Reuters.
On Sunday, the company Danone received regulatory approval for the disposal of Russian assets with a total loss of 1.3 billion dollars.
About a thousand companies have already left Russia, but in that country hundreds more companies, according to some analyses, are operating or have suspended operations.
On the other hand, Western countries froze the gold and foreign exchange reserves of the Bank of Russia for about 300 billion dollars.
Germany nationalized Gazprom’s plant and placed Rosneft’s refinery “under its control”.
Russia has vowed to retaliate after an EU proposal to divert billions of euros in interest from frozen Russian assets.
However, due to legal disputes that can be caused by any confiscation, Western banks are also confused.
“There are no Western assets in Russia that can be considered safe,” Masi pointed out.
Moscow has already taken control of the assets of several Western companies, including Fortum, Carlsberg and Juniper, a Reuters analysis showed.
Russia’s state news agency RIA calculated that the West could lose assets and investments worth at least $288 billion if Moscow decides to retaliate. That sum corresponds to the direct investments of the EU, Group of 7, Australia and Switzerland in the Russian economy as of 2022.
However, Moscow’s tough stance is hurting Russia as well, and sanctions expert Jeremy Zucker says that many of his firm’s clients from various industries have decided to leave Russia altogether and likely won’t return there even when the war is over.
As a result, significant technologies have left Russia and it may no longer be able to support certain high-tech manufacturing, Zucker of US law firm Deckert told Reuters.
