27 Oct 2023 15:33

Philip Morris values its 23% share in tobacco distributor Megapolis at $351 million

MOSCOW. Oct 27 (Interfax) - Philip Morris International (PMI), one of the world's leading tobacco products producers, estimates its 23% ownership stake in Megapolis, a leading Russian tobacco distributor, is worth $351 million, PMI said in a report.

As such, the distributor's entire business can be valued at $1.5 billion.

There are still risks associated with this investment as the fair value of these assets is difficult to predict due to volatility in foreign exchange and commodity markets, supply chain disruptions, and current economic, political and social conditions, the company said.

In addition, PMI reported cumulative foreign currency translation losses associated with Megapolis Distribution BV of approximately $588 million.

As reported, Philip Morris International previously stated that it was considering restructuring its business in Russia, including the transfer of assets.

This year, investors associated with Megapolis, whose beneficiaries are Igor Kesaev and Sergei Katsiev, became owners of the Imperial Brands Russian business. The new owners changed the names of the Imperial Brands companies to International Tobacco Group and International Tobacco Group Volga (production site).

According to the SPARK-Interfax analytical system, in 2022 the revenue of Megapolis (JSC Megapolis Trading Company) totaled 973.5 billion rubles against 901.9 billion rubles in 2021, while net profit reached 21.6 billion rubles and 19.4 billion rubles, respectively.