British American Tobacco has the option buy back its Russian assets, but doubts it will happen

MOSCOW. Feb 8 (Interfax) - Tobacco company British American Tobacco (BAT), which sold its Russian assets in 2023, has a two-year option to buy them back, a company report said.

However, the company said this scenario is unlikely. Given the perceived risk of investing in Russia in the future and the resulting high discount rate, "any cost associated with the exercise of the options would be immaterial," the document said.

BAT on Thursday reported a decline in revenue for 2023 to GBP 27.28 billion from GBP 27.66 billion the year before. The decrease was due largely to the sale of businesses in Russia and Belarus, the company said in a press release. The company's pre-tax loss last year was GBP 17.06 billion, compared with a profit of GBP 9.32 billion in 2022.

As reported, in September 2023, BAT closed a deal to sell its businesses in Russia (BAT-SPB JSC and MUMT JSC) and Belarus; the buyer was a consortium led by local management. After the transaction, the assets were renamed ITMS Group.

The Unified State Register of Legal Entities shows that, since the end of September 2023, the owner of JSC I.T.M.S. is UAE-based BFI Holding.

Kommersant, referring to the Abu Dhabi Global Market (ADGM) register, said that BFI Holding is owned by Faruk Yener, Oleg Barvin, Elena Zavarzina, Andrey Osavolyuk and Sergey Kudinov. Yener was general director of BAT for Russia, Turkey, the Caucasus, Central Asia and Belarus, while Barvin headed the legal department. Osavolyuk and Kudinov may be associated with BAT's distributor in Russia, SNS Group. The ADGM register does not reveal the shares held by the founders of BFI Holding.

JSC I.T.M.S. posted revenues in 2022 of 42.739 billion rubles versus 38.935 billion rubles in 2021, while net profit was 2.205 billion rubles versus 1.729 million rubles, respectively.