The date of entry into force of US sanctions against the GAZ group of Oleg Deripaska was postponed from October 23 to December 12, 2018. This was announced on October 19 by the US Department of the Treasury's Department of Foreign Assets Control (OFAC). Previously, other Deripaska companies, UC Rusal and En +, received the same delay. Also on Friday, Deputy Prime Minister Dmitry Kozak met with US Ambassador to Russia John Huntsman. At the meeting they discussed the possibility of the GAZ group leaving the sanctions. According to Kozak, the government considered various options: “With the participation of the state, and with the participation of other potential buyers.” One option is to sell the share to the Volkswagen automaker. “There was such a dialogue, but so far there is no solution,” the deputy prime minister added.
The US Treasury Department allows for the lifting of sanctions if Deripaska’s share falls below the control. In June, it became known that a businessman was discussing the possibility of selling part of a stake. Among the probable buyers was the chairman of the board of directors of the GAZ Group, Siegfried Wolf.
The GAZ Group is the largest asset of the machine-building holding Russian Machines, Deripaska. It produces buses, light commercial vehicles, trucks, automotive components, collects passenger cars under a contractual scheme. The group's net profit in 2017, according to IFRS, increased by more than 3 times to 3.5 billion rubles, its revenue - by almost 10% to 164.6 billion rubles.
On April 6, 2018, GAZ entered the US sanctions list along with Deripaska and his other companies. Initially, the Ministry of Finance ordered US residents to cease operations with the Russian automaker until June 5, then the deadlines were shifted to October. Formally, the ban does not apply to residents of other countries, but they can fall under sanctions for cooperation with companies from the list. The major partners of the GAZ Group, the German automakers Daimler and Volkswagen, whose cars are manufactured at GAZ facilities, have not ceased cooperation with the group.
For the GAZ group, the sanctions are not as dramatic as for UC Rusal. After all, they hit on exports. And unlike the metallurgical company, the automaker sells most of its products in Russia, comments Aton's senior analyst, Mikhail Ganelin. But the company has foreign partners in Russia, and the group buys part of the components abroad. This may interfere with both current projects and the future, he points out. In addition, the company aims to develop exports, recalls VTB Capital analyst Vladimir Bespalov.
Deripaska was looking for an investor for the GAZ Group and before the sanctions, Ganelin continues. The current situation may accelerate negotiations on the sale of shares in GAZ, for example, with Volkswagen, he notes. And the question is no longer in price, but in the investor’s readiness to invest in the development of the GAZ group and the market. After all, while Volkswagen in Russia is concentrating on passenger cars, he believes.
In 2017, GAZ Group and Volks-wagen extended the agreement on contractual assembly of passenger cars until 2025. Among the new projects are the purchase of German engines for Gazelle. And in October 2018, the general director of the Volkswagen Group Rus, Markus Ozegovich, announced the intention of his company, which already invested 1.85 billion euros in Russia, to invest another 500 million euros. Part of this money can go on doubling the power of the Russian engine plant. Ozegovic did not name other projects.
The representative of the GAZ group declined to comment. Volkswagen and Daimler did not respond to Vedomosti requests.