Nissan registers $687 million losses in Russia, sells business for 1 euro ONLY

Nissan bears $687 million losses, sells Russian business for 1 euro ONLY with 6 year buyback option, reports IANS.

Japan's Nissan Motor Company takes the losses as it has decided to sell its Russian operations with an option to buy it back within six years. Nissan had suspended its Russian operations following Russian military operations in Ukraine and the sanctions imposed by the West. The company stated it will take a one-off impact of approximately 100 billion yen from this exit. According to Nissan, its Executive Committee approved the sale of its Russian operations to NAMI, the Central Research and Development Automobile and Engine Institute. The sale will transfer all Nissan operations in Russia under the Nissan Manufacturing Russia LLC (NMGR) legal entity to NAMI for future passenger vehicle projects, Nissan stated.

This covers Nissan’s manufacturing and R&D facilities in St Petersburg, and the Sales and Marketing centre in Moscow, which will operate under a new name. The terms of the sale would allow Nissan the option to buy back the entity and its operations within the next six years. Under the new ownership of the NMGR entity, all of Nissan`s employees in the market will receive employment protection for 12 months.

The sale is expected to be formalised in the coming weeks following approvals from the relevant authorities. Nissan said it maintains its full-year guidance and details will be reported after further assessment as part of the regular disclosure during the second quarter results in November 2022.

Meanwhile, French auto major Renault which holds a sizable stake in Nissan said the latter’s exit from Russia will have a negative contribution to Renault Group’s net income estimated at 331 million euros for the second half of 2022 (before IFRS adjustments). This transaction will not impact Renault Group’s operating margin, free-cash-flow and financial outlook, Renault added.

"On behalf of Nissan, I thank our Russian colleagues for their contribution to the business over many years. While we cannot continue operating in the market, we have found the best possible solution to support our people," said Nissan President and CEO Makoto Uchida.

Since Nissan assumed zero activity in the market in this fiscal year, Nissan remains on track to achieve its business objectives under the Nissan NEXT transformation plan, as the company progresses towards its Ambition 2030 goals.

(With inputs from IANS)