8 Feb 2023 16:56

Vestas ends all activity in Russia, leaving stranded assets and cash idle

MOSCOW. Feb 8 (Interfax) - Danish renewable energy equipment manufacturer Vestas has chosen the most uncompromising option for exiting Russia, one that other companies have so far preferred not to take.

Vestas was a wind power technology partner of Fortum in Russia. The company announced its exit from the country in the spring, after the special military operation in Ukraine had begun. Vestas had quite a presence in Russia, with two production sites: Vestas Manufacturing Rus, which manufactures composite blades for wind turbines, began operations in December 2018 in Ulyanovsk, and was, according to the Russian Industry and Trade Ministry, supposed to have been mothballed by the end of 2022; and together with Rusnano, the company also launched manufacturing of wind turbine gondolas at the Liebherr plant in Dzerzhinsk.

Vestas said in its annual report on Wednesday that the "environment in and around Russia" left it with "no viable options to continue to pursue orderly corporate property liquidations and activity wind down." As a result, the company on January 31 therefore "exited Russia by putting a full stop to all remaining corporate activities in Russia without delay, including terminating remaining employees and leaving stranded assets including cash idle."

From this date, Vestas will deconsolidate its enterprises in Russia - Vestas Manufacturing Rus and Vestas Rus. Both are under liquidation.

According to the report, Vestas recognized costs and impairments of 269 million euros amid the company's decision to leave the Russian market and the forced suspension of Ukrainian projects.

In particular, the company recognized write-downs for assets located in Russia and Ukraine in the amount of 159 million euros, as well as provisions of 87 million euros, which, according to the report, may be needed in connection with lawsuits filed against the company.