Western companies move to exit Russia as sanctions tighten

  • BP to divest Rosneft stake worth $25 billion
  • Pressure other energy companies to follow suit
  • Shares in companies with Russian assets were hit
  • Some Russian banks have closed their doors to the SWIFT system
  • Europe and Canada close their airspace, Russia responds

Feb 28 (Reuters) – Energy giant BP, global bank HSBC and the world’s largest aircraft leasing company AerCap joined a growing list of companies looking to exit Russia on Monday, as Western sanctions tightened the screws on Moscow over its invasion. for Ukraine.

The West moved to punish Russia with a raft of measures, including closing airspace to Russian aircraft, closing some Russian banks from the global SWIFT financial network and restricting Moscow’s ability to use its $630 billion in foreign reserves. Read more

The Russian economy was already reeling on Monday. The ruble plunged as much as 30% to an all-time low, while the central bank doubled its key interest rate to 20%, kept stock and derivatives markets closed, and temporarily banned brokers from selling securities held by foreigners. Read more

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BP, Russia’s largest foreign investor, suddenly announced over the weekend that it was giving up its 20% stake in state-controlled Rosneft. (ROSN.MM) At a cost of up to $25 billion, reducing the British company’s oil and gas reserves by half and production by a third. Read more

BP’s decision, after British government talks, has highlighted other Western companies that have stakes in Russian oil and gas projects, such as ExxonMobil. (XOM.N)total energy (TTEF.PA) paralyze (sigh).

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Equinor (EQNR.OL)The energy company, Norway’s state-owned energy company, said it would begin to divest itself of its joint ventures in Russia, although a spokesperson said, “It will take some time to dismantle the business that has been developed over decades.” Read more

Norway’s sovereign wealth fund, the world’s largest, will liquidate its Russian assets, which are worth about $2.8 billion, while Australia’s sovereign wealth fund said it plans to end its exposure to Russia-listed companies. Read more

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Large parts of the Russian economy will be a no-go zone for Western banks and financial firms after the decision to isolate some of its banks from SWIFT, a secure messaging system used in trillions of dollars worth of transactions around the world.

The European arm of Sberbank (SBER.MM)The European Central Bank, Russia’s largest lender, has warned of failure, after retracting its deposits. Read more

British HSBC Bank (HSBA.L) A note seen by Reuters showed that the company said it had begun terminating ties with a group of Russian banks, including the second-largest VTB Bank, one of the banks targeted by the sanctions. Read more

Amid the tightening pressure, even neutral Switzerland said it was adopting EU sanctions and freezing the assets of some Russian individuals and companies. It joined others by imposing sanctions on President Vladimir Putin and other officials. Read more

Some Western companies were suspending operations while others were making contingency plans as they reviewed the rapidly changing landscape of business with Russia.

Daimler Truck (DTGGe.DE) It plans to freeze its business activities in Russia with immediate effect, including cooperation with the Russian truck maker KAMAZ. Read more

Swedish car manufacturer Volvo Cars (VOLCARb.ST) Car shipments to the Russian market will be suspended until further notice. Read more

Swedish telecom group Ericsson (ERICb.ST) It said it would suspend deliveries to Russia while it assesses the potential impact of the sanctions, according to an internal memo. Ericsson could not be reached for comment.

Maersk Shipping Group (MAERSKb.CO) It said it was considering suspending all container bookings in and out of Russia.

Shares of several companies with exposure to Russia tumbled on Monday. Nokian Tires (TYRES.HE) It backed down after withdrawing its 2022 guidance. It said last week it would shift some production from Russia to Finland.

Stocks in Societe Generale (SOGN.PA)which owns Rosbank in Russia, and the automaker Renault (RENA.PA)which controls the Russian automaker AvtoVAZ, also fell.

TIT-FOR-TAT

Finnair lost a fifth of its value after withdrawing its 2022 forecast amid the airspace closure.

Russia said it was banning airlines from 36 countries from entering its airspace, including European countries and Canada, which earlier closed their airspace to Russian aircraft. US officials said Washington was considering a similar move. Read more

The leasing companies said they would terminate hundreds of aircraft lease contracts with Russian airlines due to the sanctions. Analytics firm Cirium said Russia has 980 passenger planes in service, of which 777 are leased and 515 are leased from foreign companies. Read more

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Ireland’s AerCap Holdings (AER.N)The world’s largest aircraft leasing company, where about 5% of its fleet is leased to Russian airlines, said it would stop leasing to Russia. Shares of AerCap fell more than 12 percent on Monday.

Asian Lessor BOC Aviation (2588.HK) It said most of its aircraft in Russia, or about 4.5% of its fleet, would be affected. Read more

United Parcel Service Inc., based in the United States (UPS.N) and FedEx Corp (FDX.N)Two of the world’s largest logistics companies said they have halted deliveries to Russia and Ukraine. Read more

The European Union has banned Russian media outlets RT and Sputnik, while Canadian telecoms companies have also stopped offering RT. Google has banned RT and other Russian channels from receiving money for ads on websites, apps and YouTube videos, similar to the move by Facebook. Read more

The head of the European Union’s internal market told the CEOs of Alphabet that owns Google (GOOGL.O) It united on YouTube on Sunday to ban users who promote war propaganda as part of measures to stop misinformation about Ukraine.

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Additional reporting by Nerijus Adomaitis in Oslo, Fu Yun Che in Brussels, Jamie Freed in Sydney, Maria Bonizath and Bargav Acharya in Bengaluru; Written by Carmel Crimmens and Edmund Blair; Editing by Grant McCall and Thomas Janowski

Our criteria: Thomson Reuters Trust Principles.

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