Industry Ministry waiting for Knauf documents on exit from Russia to assess terms

TASHKENT. April 23 (Interfax) - The Russian Industry and Trade Ministry is aware of Knauf Group's intention to exit its business in Russia, but the terms of the deal can only be assessed after documents are received from the German construction materials manufacturer and submitted for review to the government commission for control over foreign investment, Deputy Industry Minister Viktor Yevtukhov told reporters.

Knauf issued a statement on Monday saying that, in light of current events, the company had decided to part with its business in Russia after more than 30 years in the country. The statement, reported by Deutsche Welle (designated a foreign agent in Russia), said that the whole business, including mining of raw materials, production and sales, will be transferred to local management in order to preserve 4,000 jobs.

"The word 'transfer' is probably not very appropriate here, because assets are not transferred [in Russia]. If a company leaves the jurisdiction of the Russian Federation for some reason, there is a sale," Yevtukhov said.

"It's another matter that an asset can be sold for any amount of money, but not more than 50% of its market value, as you know. Usually, if management acts as the buyer, there can be such situations where the business is handed off nominally for a ruble or one euro, but if such a decision is made, it is followed by an option, meaning the possibility of returning to the market," Yevtukhov said, describing possible options for Knauf's exit from Russia.

He said his ministry has not yet received documents from Knauf about its intention to sell the business.

"In these documents it will be written on what terms Knauf intends to leave Russia. With a return, without a return, for a ruble or for 50% of the market value. We will have to review all this," Yevtukhov said.

"Judging by the fact that no political statements were made, indeed, the issue here after all is probably one of economics to a large extent - difficulties with logistics, perhaps, difficulties raising financing at European banks," Yevtukhov said, adding that if Knauf exits with a buyback option it will have two years to return to Russia.