BAT CEO Says Sale of Russian Business Caused Heavy Losses, Making Buybacks Unlikely

British American Tobacco (BAT) CEO Tadeu Marroco said that BAT suffered heavy losses in the sale of its Russian and Belarusian assets.

According to a Reuters report on December 6, British American Tobacco (BAT) CEO Tadeu Marroco said that BAT suffered heavy losses in the sale of its Russian and Belarusian assets.

 BAT Chief Executive Tadeu Marroco | Image source: Reuters  

In a trading update on December 6, Marroco said that the proceeds BAT received represented only a small fraction of the true value of its Russian and Belarusian business.

Last September, BAT sold those assets to a consortium led by its local Russian management team, ending an 18-month process of exiting the world’s fourth-largest cigarette market following Russia’s invasion of Ukraine.

At the time, BAT did not disclose the sale price, nor did it say whether the deal included terms allowing the company to buy back the business at a later date.

Marroco pointed out that because Russian authorities limited any buyback option to within two years, the company is unlikely to exercise the repurchase option in the sales agreement.

When the transaction was announced, the company had already recognized an impairment charge and related costs of 629 million pounds ($792 million) associated with the sale.