WSJ: $ 59 billion in losses to Western companies in Russia after withdrawals and sanctions

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Western companies have accumulated more than $ 59 billion in losses from their Russian operations, and that number is expected to rise as sanctions hit the economy and sales and downtime continue, according to a Wall Street Journal report. Journal.

Nearly 1,000 Western companies have pledged to leave or cut ties with Russia following its invasion of Ukraine, according to Yale researchers.

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Many are reassessing the reported value of these Russian companies, as the weakening local economy and a lack of willing buyers make the once-valuable assets useless.

Isolation companies cover a wide range of industries, from banks and breweries to manufacturers, retailers, restaurants and shipping companies, and even a wind turbine manufacturer.

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McDonald’s expects to record $ 1.2 billion to $ 1.4 billion in accounting after agreeing to sell its Russian restaurants to a local licensee Exxon Mobil owed $ 3.4 billion after halting work on an oil project and gas in Russia’s Far East, while the Budweiser Anheuser-Busch brewery lost $ 1.1 billion after deciding to sell its stake in a Russian consortium.

The economic impact of the conflict is not significant for most multinationals, in part due to the relatively small size of the Russian economy. Less than 50 companies are responsible for most of the $ 59 billion bill.

Even for them, Russian losses are usually a relatively small part of their total revenue. McDonald’s, for example, said its operations in Russia and Ukraine accounted for less than 3% of its operating income last year.

Some companies write off assets located in Russia. The Irish aircraft leasing company AerCap Holdings had a $ 2.7 billion surcharge, which included the write-off of the value of more than 100 aircraft stuck in the country. The planes were leased to Russian airlines. Other leasing companies suffer similar blows.

Other companies assume that they will not make any profit from their Russian activities, even before finalizing their exit plans. The $ 25.5 billion accounting burden on British oil company BP for its Russian holdings last month included the write-off of $ 13.5 billion worth of Rosneft shares. The company has not stated how or when it plans to sell its Russian assets.

Even some companies that have a presence in Russia are proceeding with the write-off of assets. French energy giant TotalEnergies owed $ 4.1 billion in gas reserves, citing the effects of Western sanctions on Russia.

Source: Capital

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