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VW's assets have been frozen in Russia.

 

The Ger­man com­pany announced last year that it would stop mak­ing cars in Rus­sia. This included its plant in Kaluga, where it still pays roughly 4,000 employ­ees to stay at home, and an auto­mot­ive assembly plant in Nizhny Novgorod, which it ran with Rus­sian car­maker Gaz.

Gaz last week filed a law­suit against VW, dis­put­ing an agree­ment the two had struck to end a col­lab­or­a­tion that was due to run until 2025 and called for VW’s assets to be frozen as it said the car­maker planned to leave the coun­try «in the nearest future».

The com­pany added that it had applied for approval by Rus­sian state author­it­ies to sell its busi­ness in the coun­try, includ­ing the plant in Kaluga, to a «reput­able Rus­sian investor».

«We hope that the claim will not lead to a delay of the trans­ac­tion, which aims to secure employ­ment and work for the affected employ­ees,» VW added.

Gaz did not imme­di­ately respond to a request for com­ment.

Her­bert Diess, the com­pany’s former chief exec­ut­ive, had said when the Ukraine war broke out last year that its assets in Rus­sia rep­res­en­ted roughly 0.5 per cent of the group’s total.

VW’s woes high­light the chal­lenges west­ern com­pan­ies face as they seek solu­tions for their Rus­sian busi­nesses.

Every com­pany from so-called «unfriendly coun­tries» — the list includes EU mem­bers and the US, among other jur­is­dic­tions — is required to receive state approval to sell its busi­ness in Rus­sia.

Offi­cial cri­teria for this approval are oner­ous: the value of a busi­ness will be determ­ined by Rus­sian author­it­ies and sub­ject to a dis­count of at least 50 per cent.

The frozen assets are about 204mn.

www.sba.tax

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