Valuation of companies with foreign ownership
Since 2 March 2022, Russian residents are subject to special procedures for certain transactions with individuals or entities from foreign states undertaking “unfriendly” actions. This applies, in particular, to providing loans and borrowings (in Russian Roubles) to such parties, as well as transactions involving the transfer of ownership rights to real estate and securities. This may refer to acquisitions of controlling stakes, mergers and acquisitions, asset purchases, and other investment forms. These transactions require special approval from the Government Commission (per Decree of the President of Russia No. 618 dated 8 September 2022 “On Special Economic Measures in the Financial and Fuel and Energy Sectors Due to Unfriendly Actions by Some Foreign States and International Organisations”). The Commission’s approval cannot be obtained without a valuation conducted by a valuer recommended by the Russian Ministry of Finance. FBK is included in this list.
- Application submission. A foreign investor or a Russian company with foreign ownership submits a valuation request detailing the assets, ownership structure, transaction parties, and valuation objectives.
- Data collection and analysis. Valuers gather and analyse company and asset data, including financial reports, market insights, legal documentation, etc. Special attention is paid to the impact of sanctions and economic uncertainty on asset value.
- Conducting valuation. The valuation accounts for the current economic environment, risks, and potential value losses due to sanctions and other restrictions.
- Valuation report preparation. A detailed report is prepared, outlining methodologies, rationale, and findings on the present value of assets.
- RSA (Russian Society of Appraisers) review. The report undergoes expert review to confirm compliance with Russian legislation and valuation standards.
- Government Commission review. The report is submitted to the Government Commission to assess its quality and the conformity of methodology and findings with the set requirements and criteria.
- Decision-making. Based on the submitted report and analysis, the Commission decides on the transaction approval and its terms and conditions, potentially recommending adjustments or additional conditions for the transaction to be approved.
- Publication and monitoring. If approved, valuation outcomes and transaction terms may be published in official sources to ensure transparency, with post-transaction compliance monitored by state authorities.
- Professional-standard valuation report.
- Expert review of the valuation report by RSA (Russian Society of Appraisers).
FBK leads in the 2024 RAEX revenue rankings of valuation groups and companies specialising in business and securities valuation.
