British American Tobacco is unlikely to exercise its option to buy back its Russian assets, given the perceived risk of investing in Russia, reports Interfax.
Following the 2022 invasion of Ukraine, many Western-headquartered firms pulled out of Russia. BAT sold its assets in Russia and Belarus to a consortium led by local management. The sale included an option to buy back the assets within two years.
After the transaction, the assets were renamed ITMS Group. As of September 2023, ITMs was owned by BFI Holding of the United Arab Emirates, according to Russia’s Unified State Register of Legal Entities.
BAT’s retreat from Russia depressed the company’s 2023 results. BAT reported revenue of £27.28 billion ($34.38 billion) a loss of £15.75 billion on Feb. 8, and attributed the declines over 2022 in part to the loss of its Russian business and its decision to write-down of the value of several U.S. cigarette brands to reflect the dimming prospects for combustible products.
BFI Holding is owned by Faruk Yener, Oleg Barvin, Elena Zavarzina, Andrey Osavolyuk and Sergey Kudinov. Yener was general director of BAT for Russia, Turkey, the Caucasus, Central Asia and Belarus, while Barvin headed the company’s legal department.
ITMS posted revenues in 2022 of RUB42.74 billion ($467.34 million) versus RUB38.94 billion in 2021, while net profit was RUB2.21 billion versus RUB1.73 million, respectively.