Fortum’s write-off of Russian assets worth €1.7 billion is an “accounting story” from which the company will not suffer, Igor Yushkov, a leading analyst at the National Energy Security Fund and an expert at the Financial University under the Government of the Russian Federation, told Izvestiya on May 11. At the same time, according to him, the Finnish energy group still retains ownership of the assets.
“Firstly, this is such a paper write-off. In reality, no one takes any money from Fortum. In their financial statements, they assumed that assets in Russia were worth approximately €1.7 billion. They had them on their balance sheet. And it was assumed that, if necessary, they would be able to sell these assets for this amount. Now they say: “We can no longer dispose of them, we cannot sell them, so these assets do not need to be taken into account on the balance sheet.” But no one alienated the right of ownership from them, ”explained the expert.
Yushkov clarified that the energy concern cannot manage assets in the Russian Federation and make a profit from them, however, the transfer of money from Fortum’s Russian assets directly to the Finnish company was previously limited – for this it was necessary to obtain a special permit. As a result, the money has been accumulating in Russian accounts for the last year. As a result, Fortum joined other companies that have canceled their investments in Russia, but they retain ownership.
“No one takes their money out of their pocket. What they used to take into account, and now they no longer take into account, the company will not suffer from this. This is purely accounting history. Maybe Fortum’s capitalization will decrease a little. <...> They will receive less revenue – yes, because this money is not transferred to them, who earn Fortum’s Russian assets here, but again, this story is not new. Therefore, as a result, they will earn less, ”concluded the analyst.
The fact that the Fortum concern will write off the Russian assets became known earlier in the day. At the same time, the head of the corporation, Markus Rauramo, said that the sale of assets in Russia after their transfer to temporary management is possible only theoretically.
On April 25, Russian President Vladimir Putin signed a decree according to which 98.23% of the shares of Fortum owned by Fortum are transferred to the temporary management of the Federal Property Management Agency.
At the same time, the Federal Property Management Agency clarified that the introduction of external share management does not deprive the owners of assets and property rights, but means that the original owner no longer has the right to make management decisions.
On May 5, the Finnish concern opposed the transfer of its shares.
On the same day, Kremlin spokesman Dmitry Peskov emphasized that actions against Fortum PJSC would continue in accordance with Russian law, and explained that the introduction of external management of the shares of a foreign company was dictated by the necessary protection of the country’s interests against the backdrop of steps from unfriendly states.
#Analyst #estimates #writeoff #Russian #assets #Fortum #billion