Russia to lose over $600m as Nissan abandons business in the country

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Nissan said it will transfer its shares in its Russian business to state-owned entity NAMI for $0.97, taking a loss of $687 million in the latest costly exit from the country by a global company.

Russia’s industry and trade ministry said that Nissan will transfer its shares to NAMI, but the sale will give the Japanese automaker the right to buy back the business within six years.

The deal makes Nissan the latest major company to leave Russia since Moscow’s invasion of Ukraine in February, mirroring a move by its top shareholder, French automaker Renault, which sold its majority stake in Russian carmaker Avtovaz to a Russian investor in May.

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

Due to supply chain issues, Nissan had suspended production at its St. Petersburg plant in March.

While maintaining its earnings forecast for the financial year ending in March, Nissan said it expects an extraordinary loss of some $687 million.

According to Renault, which owns 43 percent of Nissan and reportedly sold its stake in Avtovaz for $0.02, the decision would cause net income in the second half of 2022 to decline by $325 million.

The Nikkei newspaper reported that alliance partner Mitsubishi is also considering exiting Russia.