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The Russian assets of Swedish truck maker Volvo will be transferred to local investors, the Russian trade ministry said in a statement, Interfax reported.

A Volvo Group representative told the Financial Times that the deal was a “voluntary divestment” as the group struggled to liquidate its Russian assets following Russia’s all-out invasion of Ukraine.

The statement did not name the new owner, but Russia’s company registry showed that control of several Volvo AB subsidiaries passed this week to Expobank’s main shareholder, Igor Kim, who was involved in the foreign company and its operations. Multiple transfers of business ownership. partner.

It was unclear on Friday whether Volvo received any proceeds from the deal. The complexity of the deal underscores the challenges facing foreign companies still operating in Russia, either because they are reluctant to leave or because Russian authorities are increasingly restricting divestments.

On February 28 last year, four days after its all-out invasion of Ukraine, Volvo suspended all sales, service and production activities in Russia. Volvo’s main Russian asset is a factory in Kaluga, 180 kilometers southeast of Moscow, which produces about 3,000 Volvo and Renault-branded cars a year and accounted for about 3 percent of the group’s net sales before the suspension.

Volvo booked a provision of SEK 4.1 billion for its Russian business in April 2022, saying its total assets in the country were around SEK 9 billion.

In October last year, a group representative told Vedomosti newspaper that the group was considering selling the Russian business, as the group is currently unable to operate in Russia. The representative said the company had begun to “restructure” operations and lay off workers.

Control of several Volvo Group subsidiaries in Russia was transferred to Expobank’s main shareholder Kim and its business partners on Wednesday, according to information from the Russian company registry.

Alexey Sannikov, First Vice Chairman of Expobank, was appointed CEO of the Kaluga plant on Thursday.

Expobank grew out of the ex-Russian operations of British bank Barclays and has been owned by Kim since 2011, when the British bank exited the Russian market. Expobank was involved in the financing of several exit deals, several Russian bankers in the industry told the FT.

While many of Russia’s top banks have lost their wings due to Western sanctions, lesser-known lenders such as Expobank, Russia’s 41st largest by assets, have filled the void. Expobank is not facing any restrictions.

Natasha Tsukanova, managing director of Xenon Capital, which is advising on several exit deals, said arranging financing to buy exiting foreign companies has become a “complex challenge” for Russian buyers.

“With little access to international capital markets, Russian buyers often turn to smaller lenders,” she said.

Expobank did not immediately respond to a request for comment.

Earlier this year, Russian officials said various investors, including Belarusian and Chinese companies, were lining up to buy Volvo Group assets.

“Given the strength and status of our relationship, Russia is basically ready to give us the factory for free,” the Belarusian ambassador to Russia said in July.

However, Russian Prime Minister Mikhail Mishustin subsequently advised the Belarusian government to contact their Russian counterparts as a decision on the business had already been made.

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