Nissan sold the Russian business for 1 euro and took a loss of 687 million dollars

TOKYO, Oct 11 (Reuters) – Nissan Motor Co Ltd ( 7201.T ) will transfer its state-owned business in Russia for 1 euro ($0.97), taking losses of around $687 million on Tuesday. The latest expensive move out of the country by an international company.

The Japanese automaker said it will transfer its stake in Nissan Manufacturing Russia LLC to state-owned NAMI. The deal gives Nissan the right to buy back the business within six years, according to the Russian Industry and Trade Ministry.

The deal makes Nissan the latest major company to leave Russia after Moscow sent tens of thousands of troops to Ukraine in February. It also reflects the move by French automaker Renault ( RENA.PA ), Nissan’s largest shareholder, which sold its stake in Russian carmaker Avozavaz ( AVAZI_p.MM ) to a Russian investor in May.

Nissan’s manufacturing and research facilities in St. Petersburg, as well as its sales and marketing center in Moscow, will be sold to NMI, the ministry said.

Nissan said it expected an extraordinary loss of about $100 billion ($687 million) but maintained its earnings forecast for the financial year ending in March.

Renault, which owns 43% of Nissan, estimates that the decision by its Japanese partner will bring its net income to 331 million euros in the second half of 2022.

Nissan suspended production at its St. Petersburg plant in March due to supply chain disruptions. Since then, the company and the local department have been monitoring the situation, he said. But the change in the external environment said “there is no visibility”, Nissan decided to leave.

Junior alliance partner Mitsubishi Motors Corp ( 7211.T ) is also considering an exit from Russia, Nikkei newspaper said. A Mitsubishi spokesman said nothing has been decided.

The exit comes as Nissan embarks on a major overhaul of its relationship with Renault. The two said on Monday that they are discussing the future of their alliance, which includes Nissan, with a view to investing in Renault’s new electric vehicle venture.

In the year The talks, which promote the biggest reshuffle at the alliance since the arrest of longtime chief executive Carlos Ghosn in 2018, include the possibility of Renault selling a controlling stake in Nissan, two people familiar with the talks told Reuters. .

Renault reportedly sold its stake in Atovaz for one ruble ($0.02).

The Nissan deal was “of great importance to the industry,” Russian Industry and Trade Minister Denis Manturov said in a statement.

($1 = 145.6200 yen)

($1 = 63.8500 rubles)

Reporting by Gleb Stolyarov, Caleb Davis and Satoshi Sugiyama; Writing by Alexander Marrow and David Dolan; Edited by Louise Havens and Mark Potter

Our standards: The Thomson Reuters Trust Principles.