Mercedes-Benz says Russia’s nationalization could threaten $ 2.2 billion in assets

London-Mercedes-Benz has assets of € 2 billion ($ 2.2 billion) and could be threatened by Russia’s proposal to nationalize the assets of foreign companies that have left due to the invasion of Ukraine, Germany Said a luxury car maker.

The company said in an annual report released Friday that the war in Ukraine created risks ranging from the destruction of parts to the supply of energy to cyber attacks.

“These risks can be exacerbated by the potential expropriation of assets of a Russian subsidiary,” said Mercedes-Benz.

United Russia, the ruling party of Russia, said this week that the government committee has approved the first step to nationalize the assets of more than 25 percent of foreign-owned businesses from “unfriendly countries.”

Mercedes-Benz has an automobile factory in the town of Esipovo, 40 km (25 miles) northwest of Moscow, with more than 1,000 employees producing E-class sedans and SUVs.

It opened in April 2019 with the attendance of Russian President Vladimir Putin. It was the first factory opened by a foreign automaker in a few years in Russia, where investment in the once fast-growing automobile industry was exhausted amid western sanctions and economic stagnation.

At the opening ceremony, Putin said the plant produces 25,000 cars a year and invests less than $ 300 million in the project.

Mercedes-Benz said the Russian unit, valued at € 2 billion at the end of 2021, has debt to banks of around € 1 billion for which automakers issued global guarantees.

($ 1 = 0.9086 euros)

By Nick Carey