Porsche unable to sell Russian assets for over one year, expects to do so in 2024

MOSCOW. March 13 (Interfax) - The Russian assets of German luxury car manufacturer Porsche AG, whose sale has been discussed since the end of 2022, have not yet found a new owner, the company's annual report published on Tuesday said.

Porsche indicated its intention to sell its Russian assets a year ago, the 2023 semi-annual report of the Volkswagen group, of which the company is a part, said. It was reported that at the end of 2022, an agreement had been reached between Porsche AG and an independent investor to sell Porsche Russland LLC (the official Russian importer of Porsche), Porsche Center Moscow LLC (Porsche dealer), and Porsche Financial Services Russland LLC. An impairment loss of 25 million euro was recognized for these companies in Porsche's 2022 financial results.

An option to repurchase the assets was agreed with the investor, which could be exercised no earlier than five, and no later than ten years after the transaction is closed. The identity of the investor was not disclosed.

Porsche remains committed to selling its Russian subsidiaries, the company's 2023 financials say, emphasizing that the sale is expected to be completed before the end of fiscal 2024 due to changes in external conditions.

The Porsche press service did not disclose to Interfax the status of negotiations on the sale of the company's Russian assets, or the reason why a deal has not yet been done. Porsche also did not reveal the number of potential investors with whom it has held negotiations. The company only confirmed its intention to sell its Russian business this year.

The revenue of Porsche Russland LLC, the company's Russian representative office since 2003, fell 80% in 2022 to 9.3 billion rubles from 46.6 billion rubles in 2021. Financial subsidiary Porsche Financial Services Russland LLC, registered in 2008, and having much more modest turnover, earned about 148 million rubles in revenue versus 353 million in 2021.

Deliveries of Porsche cars to Russia ceased in March 2022. At that time, the brand was represented by 26 dealership centers in 20 cities across the country. Porsche sales on the Russian market in 2022 totaled 1,300 units (-79%), Autostat data show. Porsche deliveries to Russia in 2023 were made via parallel import.