On Wednesday, April 26th, the Kremlin took temporary control of Russia-based Unipro, a subsidiary of the German energy group Uniper, as well as that of Finnish energy company Fortum.
The move came on the heels of the previous night’s signing of a decree by Russian President Vladimir Putin, granting the Russian state the authority to assume control of such Russia-based entities.
As outlined by that decree, the Russian Federal Agency for State Property Management (Rosimushchestvo) is temporarily being appointed administrator of the acquired companies. The organization would have the same powers an owner would have, but is not allowed to sell the company.
While the move can be reversed, it is “a response to the aggressive actions of unfriendly [those that imposed sanctions on Moscow] countries, which are aimed at creating a regulatory framework for the actual seizure of assets of Russian companies abroad,” Kremlin spokesman Dmitry Peskov told reporters on Wednesday, April 26th.
“This initiative,” he added, therefore “reflects the attitude of Western governments towards foreign assets of Russian companies,” and that, “if necessary,” the list of enterprises falling under such “external management” can be “expanded.”
Stressing the difference between Moscow’s course of action and that of the collective West’s, he stated that “in a number of states, there is a systematic transition from temporary management to the actual seizure [of Russian assets]”—with over $350 billion at stake, it is something the EU has been eager to get done, preferably in a legal fashion.
Uniper said it was reviewing the action against its Russian division Unipro, while Fortum, which was also in the process of selling off its Russian operations, said it was investigating after it had learned that the company’s CEO had been replaced and the unit put under temporary asset management.
Germany’s Finance Ministry, responsible for the government’s ownership of Uniper, said Berlin needed to assess the concrete implications of Russia’s decree.
In 2021, before the Russian invasion of Ukraine, Uniper had held exploratory talks with Russia’s InterRAO on a possible sale of some of its Russian assets, which came to naught.
For a while, it seemed it had found a Russian buyer, but in February, Uniper valued its Unipro stake at a symbolic €1 to reflect the unlikelihood of a substantive deal taking place.
In the wake of the EU’s sanctioning of Russia, its main gas supplier, Germany’s energy sector took a massive hit, which left Uniper in particular reeling.
In the first nine months of 2022 alone, the juggernaut reported a record €40 billion net loss, the biggest in German corporate history. Through a financial infusion to the tune of €34,5 billion by the German government, the company was subsequently nationalized.
Finland’s outgoing minister in charge of state holdings, Tytti Tuppurainen, tweeted that the information about Fortum was “worrying” and that the state, as its majority owner, would “follow the matter closely.”
Moscow’s latest move, analysts say, presents a hurdle for Western companies with assets there, making a clean break with Russia even more trying.
