Nissan Motor Co. Ltd. recently announced that it will sell its operations in Russia to a state-owned entity for 1 euro ($0.97), incurring a loss of around $687 million. This is in line with the withdrawals of major corporations from Russia as an aftermath of the Russia-Ukraine war. The company will transfer its ownership of Nissan Manufacturing Russia LLC to state-owned NAMI.
As part of the agreement, Nissan will have the option to repurchase the company within six years, according to a report from Reuters. For those unaware, NAMI is the Central Scientific Research Automobile and Automotive Engines Institute in Russia.
Nissan has now joined the growing list of international businesses that have exited Russia since Moscow pushed its troops into Ukraine this February. Nissan's production and development facilities in St. Petersburg as well as its sales and marketing centre in Moscow will be sold to the state-owned company NAMI. After receiving approval from the appropriate authorities, the sale is anticipated to be formalized in the upcoming weeks.
Regarding the employees, Nissan stated that all of its market-based employees will have a year of employment security under the new ownership. From its exit, Nissan will suffer a one-time loss of almost 100 Billion Yen. Nissan maintained its earnings projection for the fiscal year ending in March 2023, while expecting an unusual loss of around 100 billion yen ($687 million).
Nissan stopped operations at its St. Petersburg facility in March 2022 as a result of supply chain problems. The business and its local affiliate have been keeping an eye on the situation ever since. Nissan's decision to leave the war zone coincides with a significant change in its relationship with French automaker Renault. The two companies announced on Monday that they were in talks about the future of their alliance, including Nissan's potential investment in Renault's new electric vehicle venture.
According to the report, Renault may sell some of its controlling interest in Nissan as part of the ongoing alliance negotiations, which could result in the cooperation's greatest shakeup since longtime boss Carlos Ghosn was arrested in 2018.
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