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Russia Moves to Take Control of Uniper, Fortum Assets — Update

By Mauro Orru and Giulia Petroni


Russia says it has taken control of the assets of Germany's Uniper SE and Finland's Fortum Oyj in the country, handing the stakes in their Russian subsidiaries to a government agency.

The Federal Agency for State Property Management has taken over Uniper's 83.73% stake and Fortum's 98.23% stake in their respective Russian businesses, according to a decree signed Tuesday by Russian President Vladimir Putin.

"External management is temporary and it means that the original owner no longer has the right to make management decisions," the agency said in a statement on Wednesday. "The external manager receives powers that allow it to guarantee the efficiency of businesses based on their importance for the Russian economy."

The new decree was justified by Russia as a response to the "unfriendly actions" of the U.S. and other governments that have imposed a barrage of crippling economic sanctions against Moscow.

The move is one of the most drastic responses by the Kremlin so far to the flight of Western companies from Russia in the wake of the country's invasion of Ukraine last year.

Last summer, Russia took control of the international consortium behind the giant Sakhalin-2 oil-and-natural-gas project in Russia's Far East that counted the likes of Shell PLC and Mitsubishi Corp. among its shareholders. The Kremlin has long threatened to nationalize the assets of companies that leave Russia.

Uniper said in a statement on Wednesday that it is currently reviewing the legal situation and that the Russian government's move concerns a shareholding of 83.73% in Unipro, which is listed in Russia and counts over 4,000 employees.

The German gas trader said Unipro has already been deconsolidated from an accounting perspective since the end of last year, but approval of the stake sale, which was submitted to Russian authorities, hasn't been granted yet even though a contract with a Russia buyer was signed in September 2022.

"Uniper has de facto no longer been able to exercise operational control over Unipro since the end of 2022," the company said.

Fortum said in a statement that it hadn't received official confirmation from Russian authorities on the temporary asset management and that it is investigating the situation.

"Fortum's current understanding is that the new decree does not affect the title (registered ownership) of the assets and companies in Russia. However, it remains unclear how this affects e.g. Fortum's Russian operations or the ongoing divestment process," the group said.

Fortum said in May last year that it was preparing to leave the Russian market, with potential divestments of its operations in the country. The book value of Fortum's holdings in Russia stood at EUR1.7 billion at the end of 2022.


Write to Mauro Orru at; @MauroOrru94


(END) Dow Jones Newswires

April 26, 2023 07:11 ET (11:11 GMT)

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