ABH Holdings S.A. (ABHH) has sold Alfa-Bank Russia, taking another step towards exit from the Russian market entirely. The completion of the sale of the bank is subject to the decision of the Cyprus regulator, which has delayed its approval of the transaction and its final response for almost seven months.
Alfa-Bank Russia is the largest asset of ABHH, which is partially owned by Petr Aven, in Russia. It is indirectly owned by the holding through the Cyprus company ABH Financial Limited. The agreement on the sale of Alfa-Bank Russia was signed on the 16th of February 2023. The sale agreement contains a number of conditions, including obtaining approval from the Ministry of Finance of the Republic of Cyprus.
Until the conditions contained in the agreement are met, the sale transaction cannot be considered complete.
The company states that almost seven months have passed since the official application was submitted, but there is still no official response from the Financial Sector Sanctions Enforcement Unit of the Ministry of Finance of the Republic of Cyprus.
In August 2023, ABH Financial Limited repeatedly contacted not only the Cyprus Regulator but also the management of the European Commission because of the delay in receiving a response from the Cyprus Regulator. However, no response has been received to date.
This has created an extremely contradictory situation:
on the one hand, the European Union expects European companies to divest Russian assets, but on the other hand, the EU regulatory authorities do not give permission to exit the Russian market, the company emphasizes.
ABHH management has previously acknowledged that it is no longer possible to operate in Russia and that, as a European company, ABHH must divest its assets in Russia.
“Our position is in line with the approach of the EU, which has imposed 11 sanction packages aimed at disrupting the Russian economy and deterring European companies from doing business with Russian companies or their owners. Moreover, according to recent decisions of the EU Court of Justice, it is clear that maintaining ownership of Russian assets is the main reason for not lifting sanctions”, the company states.