28 Apr 2022 09:46

Car dealer Inchcape leaving Russia, selling business to local mgmt for 76 mln euros

MOSCOW. April 28 (Interfax) - British luxury car dealer Inchcape is leaving the Russian market, having agreed to sell its business to local management for 76 million euros to be paid over five years, the company reported.

The deal is expected to be closed in May, the company said. The purchase price of 76 million euros will be paid in annual instalments over five years.

The company plans to invest the proceeds from the sale of the Russian business in the development of its core distribution business.

Inchcape said it is selling the Russian business to local management, led by the current CEO and CFO. "We believe that this outcome best serves the needs of our OEM partners while allowing for continuing employment of our Russia based colleagues," the company said.

"Inchcape has no intention to re-enter the market, however there is a call option in place which would enable it to benefit from any increase in value of the business over the next 7 years, particularly in the event of its onward sale," the company said.

After the sale of Inchcape's Toyota and Audi retail operation in St Petersburg to dealer Klyuchavto for GBP70 million in 2021, the company's remaining Russian business, comprising retail only operations mainly for BMW Group, Jaguar Land Rover, Toyota and Volvo in Moscow, generated revenue of about GBP740 million and profit before tax of GBP47 million. Prior to the pandemic profitability peaked at about GBP10 million, the company said.