South Korean automaker Hyundai is currently unable to buy back its former plant in Russia due to the war in Ukraine.
Sources told Reuters about this.
Hyundai, along with its subsidiary Kia, was previously the largest foreign automaker in Russia. However, the company sold its St. Petersburg plant in 2024. The plant was shut down in March 2022, a month after Moscow’s invasion of Ukraine triggered a wave of Western sanctions and disrupted supply and payment chains.
The deal involved selling 100% of the plant to Russian company AGR Automotive Group for a symbolic 140 000 won (about $97) with a buyback option within two years. This option expires in January.
“There are currently no conditions under which we could buy back these shares,” said a source familiar with internal discussions at Hyundai.
Hyundai officially told Reuters that a final decision on the buyout has not yet been made.
Although the source did not specify the specific reasons why the company cannot exercise the option, it indicated that the war in Ukraine is still ongoing.
It is currently unclear whether missing the January deadline will mean the final loss of the right to buyout, or whether Hyundai will be able to negotiate an extension.
Due to reputational risks and sanctions that make it impossible for factories to operate, most foreign automakers have left the Russian market. After selling assets in 2024, Hyundai reported a loss of 287 billion won ($215 million).
- Some companies, including Hyundai, have sold their plants to Russian entities for symbolic sums, retaining the right to buy them back in the hope of returning one day. Most of these companies now produce Chinese cars under Russian brands, although the Hyundai plant produces cars under the Solaris brand, which was previously a popular model of the Korean brand on the Russian market.
- Japanʼs Mazda became the first company to lose its right to buy back: in October it decided not to exercise an option to return 50% of its Russian plant to former partner Sollers. Renault, Ford, Nissan and Mercedes-Benz also have buyback options that expire between 2027 and 2029. Toyota and Volkswagen sold their assets without a right to buy back.
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