Renault Drops Russian Operations, Records €2.195B Charge, Plans Capital Market Day
Renault Group has made significant moves regarding its Russian operations and AVTOVAZ. It will deconsolidate Russian operations and record a substantial non-cash charge. The group maintains its financial outlook and plans a Capital Market Day later this year.
Renault Group has announced that its Russian operations will be treated as discontinued activities in its half-year financial statements, ending June 30, 2022. This decision comes amidst the ongoing conflict in Ukraine. The group has also confirmed its financial outlook, as previously stated on March 23, 2022.
The transactions are complete, with all necessary approvals secured and no further conditions required. Renault Group has an option to buy back its interest in AVTOVAZ at certain times over the next six years. However, specifics about an optional purchase agreement are not publicly available. In the past, there have been efforts to acquire AVTOVAZ shares or replace Renault as a strategic partner. Renault has previously reviewed its AVTOVAZ stake during the 2014 Crimean annexation and the 2022 Ukrainian conflict.
As a result of these changes, Renault Group will record a non-cash adjustment charge of €2.195 billion in its 2022 first-half results due to its Russian operations. The group will provide an updated financial outlook and strategy at a Capital Market Day later this year.
Renault Group's deconsolidation of Russian operations and the potential buyback option for AVTOVAZ shares signal significant changes in the group's strategy. The substantial non-cash charge reflects the impact of the ongoing conflict in Ukraine. The upcoming Capital Market Day will provide more clarity on the group's financial outlook and future plans.
