MOSCOW (Reuters) – Some foreign companies trying to leave Russia are facing huge cost increases as Moscow demands deeper discounts on the price of assets they want to sell, three sources familiar with the matter said.

Russia has steadily tightened exit rules since Western companies began leaving the country shortly after the February 2022 invasion of Ukraine, which Moscow called a “special military operation”. Leaders say it’s getting harder and harder to follow the rules.

According to an analysis by Reuters, foreign companies suffered losses of more than $80 billion (74.24 billion euros) related to their operations in Russia due to write-downs and lost revenue.

The producer of Heineken beers announced on Friday that it had completed its withdrawal from Russia by selling its activities to the Russian group Arnest for a symbolic euro.

Moscow has also gradually imposed additional constraints to which is added a threat of nationalization, in particular since the takeover in July by the Russian state of the local subsidiaries of Danone and the Danish brewer Carlsberg.

Among the companies that are still negotiating the terms of their exit are the telecommunications group Veon, the first Internet group in Russia, Yandex, listed on the Nasdaq, and the first Italian bank Intesa Sanpaolo.

Moscow is already demanding a 50% discount on all sales from a foreign-owned business, after consultants selected by the Russian government assessed the assets.

Russia also requires a contribution to the Russian budget of at least 10% of the market value of the assets concerned.

According to three sources familiar with the matter who wished to remain anonymous, certain transactions are the subject of requests for additional discounts before being endorsed by the Russian authorities.

The Russian Finance Ministry said it does not force the final sale price to be reduced, but can adjust the valuation during the sale process.

“The price can only be changed if the commission becomes aware of an incorrect assessment of the market value of a foreign company,” the ministry said in a written response to Reuters.

Russia’s Economy Ministry and the Russian Central Bank also assess companies and can provide a “fix” at a price, the ministry added.

A government commission charged with monitoring foreign investment must approve deals involving companies from so-called ‘hostile’ countries, i.e. those that have imposed sanctions on Russia over its invasion from Ukraine. Banks and energy companies must also obtain personal approval from Russian President Vladimir Putin to proceed with the sale of their assets.

A source from the financial market who works with companies looking to leave Russia said the commission was rejecting some deals, saying the valuation should be 20-30% lower.

It’s an “unpredictable black box,” the source added.

Another source, who works on mergers and acquisitions and with foreign companies, said deals above $100 million were particularly at risk of being turned down.

The latest price change is holding back sales and forcing companies to consider alternatives, the source added.

Foreign companies completed 200 sales of Russian assets between March 2022 and March 2023, around 20% of which were worth more than $100 million, the Russian Central Bank reported, saying companies that were under pressure to leave Russia did so under “adverse” conditions.

(Reporting Elena Fabrichnaya in Moscow and Alexander Marrow in London, with contributions from Victor Goury-Laffont in Gdansk; Lina Golovnya, editing by Kate Entringer)

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