Moscow, Europe Brief News – Foreign Firms are pondering what they can do with their Russian investments as the Russian government rolled out a plan for foreign companies.
Belouaov laid out three options for foreign firms. He said “ The company continues to work fully in Russia”, “Foreign shareholders transfer their share to be managed by Russian partners and can return to the market later” or “ The company permanently terminates operations in Russia”.
Each option has some amount of risk involved. Those who decide to stay in the country could face backlash in the Western market where the public is taking sides with Ukraine’s government.
Those who decide to transfer their shares could end up handing over keys with few guarantees whereas those who decide to quit may face an extreme loss.
Darren Woods, Chief executive of US energy giant Exxon Mobil said “ It’s a complicated process”. However, his firm has decided to leave the country after holding a partnership worth 4 billion in Russia.
The United States and Western allies have imposed dozens of Sanctions on Russia affecting everything from a global payment system to a range of hi-tech products.
Doing business in Russia has suddenly become highly difficult and increasingly unreliable while ordinary Russians are already beginning to feel deep economic pain.
Foreign Firms Shutting Down:
Several companies like Exxon have decided to leave the country while some have decided to think over it for the time being. TotalEnergies said it would stay but had no intention to invest more in the firm.
Japan’s famous Toyota company decided to suspend their production in the country whereas IKEA closed its doors but confirmed that they will pay its workers for three months.
Charlie Robertson, Renaissance Capital Chief Economist said “ Western companies probably haven’t lost so much money so quickly due to geopolitics since the Shah was overthrown in Iran” He was mainly referring to the Islamic revolution that took place four decades ago that led to a withdrawal of Western businesses.
British Insurer and Asset Manager Royal London said it planned to sell off its Russian assets which only accounted for about 0.1% of its portfolio.
As the business winding up, the Russian first deputy prime minister said “ A fast track bankruptcy plan will support employment and social well being of citizens so that bona fide entrepreneurs can ensure the effective functioning of business”.
