Oriflame suspending investments in Russia
MOSCOW. March 22 (Interfax) - Oriflame, a Swedish company that specializes in direct sales of cosmetics, is suspending investments, marketing activity, and training in Russia, the company said in a statement published on its website.
Oriflame is also suspending online sales to end buyers in Russia.
The ongoing events in Ukraine "along with operational and legal challenges makes it impossible for us to continue our Russian business in its current form," the statement said.
"These actions will have a material impact on our business in Russia," it said.
The board of directors in Oriflame Holding Limited has designated Cetes Cosmetics LLC and Oriflame Cosmetics LLC as unrestricted subsidiaries under, and in accordance with, the indenture governing senior secured notes due 2026 issued by Oriflame Investment Holding Plc and the Oriflame Group revolving credit facility. In connection with the designation as unrestricted subsidiaries, the guarantees of the notes provided by Cetes Cosmetics LLC and Oriflame Cosmetics LLC, as well as the pledges of capital stock of those entities, will be released. In addition, the guarantees from those companies of the revolving credit facility will also be released.
Oriflame announced earlier that it was stopping exports from its Russian factory to Poland, from which products are shipped to Ukraine, among other places.
International credit rating agency Moody's downgraded Oriflame Holding Limited's corporate family rating to 'B2' from 'B1' on Tuesday. "The downgrade reflects the deteriorated operating environment in Russia, where the company generates around 16% of consolidated revenues, and the significant negative impact that the reduction of the activities in the country will have on the company's operating performance," Moody's said.