Exclusive-Hyundai not in a position to buy back Russian auto factory, source says

By Hyunjoo Jin, Heejin Kim and Gleb Stolyarov

SEOUL/MOSCOW, Dec 29 (Reuters) - South Korean automaker Hyundai is not successful a presumption to repurchase its erstwhile manufacturing works successful Russia owed to the continuing warfare successful Ukraine, a root acquainted with the substance told Reuters, arsenic a ​buyback enactment appears acceptable to expire adjacent month.

Along with its affiliate Kia, Hyundai was erstwhile the biggest overseas carmaker successful Russia. But it sold ‌its works successful St. Petersburg successful 2024. Operations astatine the installation had been suspended since March 2022, a period aft Moscow's penetration of its smaller neighbour, which provoked a backlash of Western sanctions ‌that disrupted proviso chains and payments.

The deal, which saw Hyundai merchantability 100% of the installation to Russia's AGR Automotive Group for a symbolic 140,000 won ($97), included a two-year buyback option. That clause expires successful January.

"It is not a concern wherever we tin bargain backmost the shares," said the source, who is acquainted with Hyundai's interior deliberations but asked not to beryllium named owed to the sensitivity of the matter.

Hyundai told Reuters successful a connection that a last determination has not yet been made connected the ⁠buyback option. AGR Automotive Group did not respond to a ‌request for comment.

CLOCK IS TICKING ON FOREIGN CARMAKERS' BUYBACK OPTIONS

Though the idiosyncratic did not elaborate connected the circumstantial reasons the institution could not enactment connected the buyback option, helium pointed to the ongoing struggle successful Ukraine.

While U.S. President Donald Trump has made ‍ending the warfare a apical precedence of his medication and is pressing Kyiv and Moscow to hold to a bid deal, the warring continues and U.S. and EU sanctions against Russia stay successful place.

"The warfare should beryllium over," the idiosyncratic said.

It was not wide if missing the January deadline would pb to Hyundai definitively renouncing its close to a buyback, ​or if the institution could perchance negociate an hold of the option.

With their reputations astatine involvement and Western sanctions making it intolerable for overseas carmakers to ‌keep factories operating, astir pulled retired of the Russian market.

When it sold its Russian assets successful 2024, Hyundai said it would instrumentality a 287-billion-won deed from the deal.

Some, similar Hyundai, sold their plants to Russian players for symbolic amounts and agreed options to repurchase them wrong fixed timeframes successful the anticipation of 1 time returning.

Most of those plants are present assembling Chinese cars nether Russian brands, though Hyundai's mill is producing vehicles nether the Solaris brand, which was antecedently the sanction of a fashionable exemplary produced by the Korean automaker for the Russian market.