Finland-based tyre manufacturer Nokian Tyres has signed an agreement to sell its Russian operations to Tatneft PJSC, the company announced in a press release on Friday.
The statement revealed that the deal will be worth an estimated 400 million euros, but added that figure was based on a debt free and cash free purchase price.
The final value of the detail will depend on factors such as net cash, working capital adjustments and changes in exchange rate between euros and Russian rubles.
"The transaction is subject to approval by the relevant regulatory authorities in Russia and other conditions, which creates substantial uncertainties related to the timing, terms and conditions and the closing of the transaction," the statement said.
The buyer, Tatneft PJSC, is Russia's fifth largest oil company and previously bought out Finnish company Neste's operations in Russia in 2019.
Nokian Tyres announced in June this year that it was planning a managed withdrawal from Russia as EU sanctions were posing "significant difficulties" for its operations in the country.
"This is of course a very important milestone in the sale of our Russian operations," the company's Communications Director Päivi Antola said, adding that there is currently no set timetable for when the deal will be finalised.
Nokian Tyres began operating in Russia in 2005 and by 2021, approximately 80 percent of the company’s passenger car tyres were produced in the country.
The withdrawal will have a "significant impact on Nokia Tyres' financial performance, especially on turnover in Central Europe," Antola noted.
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