21 Apr 2023 10:39

Continental agrees to sell Russian tire plant to S8 Capital - paper

KALUGA. April 21 (Interfax) - Continental AG, which owns a tire plant in Kaluga, has agreed to sell its stake in Russian distributor Continental Tires Rus to S8 Industrial Assets, an affiliate of lottery tycoon Armen Sarkisyan's S8 Capital, national daily Kommersant reported on Friday, citing a source.

The paper said that, "judging by everything," a similar deal has been made for the tire plant as well, and both deals are waiting for approval from the Russian authorities.

Continental reported that its Russian division earned a net profit of 1.1 billion rubles in 2022. Continental Tires Rus LLC reported that its net profit fell 62.6% to 415.264 million rubles in 2022 on revenue down 40.8% to 9.846 billion rubles.

Continental CEO Nikolai Setzer told reporters in Hannover earlier that the company is continuing to pursue a controlled exit from the Russian market. Last year was difficult for the company, as political developments pushed up prices for raw materials, semi-manufactures, energy resources and logistics, he said.

Continental's tire plant in Kaluga suspended production in early March, then resumed production from early April to the end of June to build up inventories of finished products. It then went idle again before resuming operations in August.

The Continental Kaluga plant opened in the Rosva industrial park in this Russian city in 2013 at a cost of 240 million euros. The plant manufactures 13 to 21 inch tires under the Continental, Gislaved and Matador brands.

S8 Capital said on its website that it is a diversified Russian holding that specializes in creating and developing high-tech products and services. The group, which has been active on the market since 1993, has projects in the financial sector, retail, telecommunications, e-commerce and digital media.