PMI: New Rules Make Leaving Russia Difficult

New rules are making leaving Russia more difficult, Philip Morris International CEO Jacek Olczak told Bloomberg.

Following Russia’s military invasion of Ukraine, PMI and other tobacco companies announced they would scale down their operations and eventually exit the country.

In anticipation of that move, PMI throughout 2022 provided financial figures that excluded its Russian business. Its full-year results, however, included Russia again.

Olczak told Bloomberg the decision does not signal a change in plans. Rather, it reflects the difficulty of exiting Russia. “As long as we are the owner, we will include the [Russian] number,” Olczak said.

According to Olczak, new regulations have made it more difficult for foreign investors to exit Russia. In any transaction, the government now has an important voice on asset valuations, access to cash flow and dividends, he said. This makes it hard for any party interested in taking over the business.

Meanwhile, Olczak said PMI was considering coming back on a more sustainable basis to Ukraine.

In related news, BAT expects to complete the sale of its Russian business to local partners in 2023, according to Reuters.

BAT said it was in advanced discussions with a “joint management distributor consortium” on the sale of its businesses in Russia and Belarus but did not reveal the identity of the party or divulge further details on the talks.

The company said in March 2022 that it was in talks to transfer its Russian business to its Russian distributor, SNS Group of Companies.