29 Aug 2022 16:58

Tatneft to receive 35.6 bln rubles from sale of tire business to Tatneftekhiminvest-holding

MOSCOW. Aug 29 (Interfax) - Tatneft will receive 35.55 billion rubles from the sale of its tire business in Russia to Tatneftekhiminvest-holding, the company said in its financial reporting to IFRS.

"In Q2 2022, the group sold stakes in subsidiaries that constituted the tire business segment to a state-controlled company for 35.555 million rubles on installment payment terms. The fair value of the consideration, determined based on discounted cash flows, amounted to 11.499 million. Amid significant changes in the economic situation, including those caused by geopolitical processes, the sale of the tire business will allow the group to concentrate on key strategic projects," the company said.

As reported, in May 2022, Tatneft entered into an agreement to sell its tire business in Russia to Kazan-based JSC Tatneftekhiminvest-holding. The perimeter of the deal included MC Tatneft-Neftekhim, Nizhnekamsk Truck Tire Plant, Trade House Kama, Nizhnekamskshina , JSC Nizhnekamsk Mechanical Plant and JSC Yarpolimermash-Tatneft. The press service of the company reported then that the KamaTyresKZ project for the creation of tire production in Kazakhstan, implemented by Tatneft was not included in the deal. Later, Tatneft excluded KamaTyresKZ from its list of affiliated entities for H1 2022 based on a justification received on June 20.

On June 3, Tatneft-Neftekhim, Nizhnekamskshina, Nizhnekamsk Truck Tire Plant, and Trade House Kama were included in the EU sanctions list. According to a publication in the EU's official journal, sanctions were imposed on these enterprises due to production and supply of tires for Russian equipment used in the military operation in Ukraine.

A week later, Tatneft announced the closure of transactions for the sale of tire businesses in Russia to Tatneftekhiminvest-holding. The company's cooperation with the tire enterprises in Russian, including the supply of raw materials, continued on a commercial basis, given previously assumed obligations.

The complex of tire business enterprises sold by Tatneft operates under Kama Tyres brand. It includes Nizhnekamskshina (production of passenger car and light truck tires, industrial tires), Nizhnekamsk Truck Tire Plant (combined and solid metal cord truck tires, agricultural tires), as well as service enterprises and Trade House Kama, which sells tires and supplies materials and raw materials to the tire plants.

JSC Tatneftekhiminvest-holding coordinates the activity of oil and gas-chemical complex enterprises in Tatarstan. According to the company's list of affiliates as of December 31, 2021, 48.972% in the authorized capital of the holding is owned by JSC Svyazinvestneftekhim, whose sole shareholder is Tatarstan. The boards of directors of Tatneft, Tatneftekhiminvest-holding and Svyazinvestneftekhim are headed by Rustam Minnikhanov, President of Tatarstan.