Hyundai halts plan to buy back Russian plant amid war – report

Hyundai, the South Korean automaker, cannot determination guardant with buying backmost its erstwhile accumulation works successful Russia if the warfare successful Ukraine persists, a root told Reuters.

The contractual enactment allowing the institution to bargain backmost the plus is owed to expire successful January.

Hyundai and its affiliate Kia sold the St Petersburg works successful 2024 to Russia’s AGR Automotive Group for Won140,000 ($97), aft halting accumulation successful March 2022.

Operations were suspended soon aft Moscow’s penetration of Ukraine, which triggered extended Western sanctions that disrupted proviso chains and payments.

The merchantability statement included a two-year clause enabling Hyundai to repurchase 100% of the facility, acceptable to lapse successful January 2026.

Hyundai said astatine the clip it would grounds a Won287bn impairment complaint from the disposal.

“It is not a concern wherever we tin bargain backmost the shares,” the root said, requesting anonymity due to the fact that of the sensitivity of Hyundai’s interior discussions.

Hyundai told Reuters successful a connection that it has not yet reached a definitive determination regarding the stock buyback option.

While the root did not outline each the obstacles to exercising the option, helium pointed to the ongoing struggle successful Ukraine, with warring continuing contempt diplomatic efforts and US and EU sanctions connected Russia remaining successful place.

It is unclear whether nonaccomplishment to conscionable the January deadline would permanently cancel the buyback close oregon whether an hold could beryllium agreed.

Before the sale, the St Petersburg works ranked among the biggest car factories successful Russia owned by an overseas company, susceptible of turning retired implicit 200,000 Hyundai and Kia vehicles annually.

In 2019, the 2 brands unneurotic delivered much than 400,000 vehicles successful the Russian market, accounting for astir 23% of each new-car sales, with astir fractional of those units manufactured wrong the country.

The works present produces vehicles nether the Solaris name, antecedently utilized by Hyundai successful the Russian market, arsenic Chinese marques summation crushed successful the country’s automotive sector.

Earlier this month, Hyundai Mobis, the main parts supplier to Hyundai Motor Group, announced the enlargement of its R&D operations successful India to conscionable increasing planetary demand.

The institution is mounting up a caller R&D installation successful Bengaluru focused connected bundle and infotainment systems for planetary customers. This centre volition enactment intimately with its main R&D hub successful Hyderabad, opened earlier this year.

"Hyundai halts program to bargain backmost Russian works amid warfare – report" was primitively created and published by Just Auto, a GlobalData owned brand.