Home » Putin blocks asset sell-off, targets key Italian companies

Putin blocks asset sell-off, targets key Italian companies

Moscow Financial District
Energy major Enel and Italy’s two biggest banks, UniCredit and Intesa Sanpaolo, are likely to end up on a list of firms from “hostile” nations that cannot shed their Russian assets

Russia blocks foreign sell-offs. In response to Western sanctions, the Kremlin issued a decree that forbids “hostile” countries from selling shares in the banking and energy sectors until this year’s end.

  • According to Kommersant, three key Italian companies – energy major Enel, plus two banks, UniCredit and Intesa Sanpaolo – made the cut. The list with all the groups and assets involved is expected this week, although President Putin will have the final word and can grant exemptions.

Enel’s woes. The State-participated energy company had said it would leave the Russian market as early as March. In June, the company announced it was selling off its 56.43% share in its Russian division, Enel Russia, by Q4 2022, subject to the decision of Russian authorities.

  • The company was ready to sell off its Russian power generation assets, which include approximately 5,6 GW of conventional capacity and around 300 MW of wind capacity at different stages of development. It now seems like that might have to wait a bit longer.

UniCredit and Intesa Sanpaolo, Italy’s two biggest banks, which also happen to be among the European banks with the most prominent presence in Russia, have been mulling their exit from the country and heavily reducing their exposure since Russia invaded Ukraine in late February.

  • Unicredit is reportedly working to sell its assets to third countries that aren’t affected by sanctions. It’s directly exposed to Moscow through its Russian Division, Unicredit Bank Russia, and indirectly through its German subsidiary HVB and Corporate & Investment Banking (CIB), which operates in 50 countries.
  • Intesa Sanpaolo has already halted its investments and curtailed financing in Russia and Belarus, and it’s gearing up to expand on its withdrawal from the Russian market.

How are Italian companies behaving? More and more of the country’s biggest groups have been either leaving Russia or readying to do it, suspending or scaling back operations.

  • According to Yale University’s ever-updated list of businesses, just 13 out of 39 major Italian brands are “digging in” the Russian market.
  • Il Messaggero noted that seven among the biggest Italian companies continue operating; other seven are ready to leave (including UniCredit and Intesa Sanpaolo); four have left; other four have downsized operations (including Enel), and five temporarily suspended them.

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