Conti records $85 million expense for exiting Russia

HANOVER, Germany—Continental A.G. recorded costs totaling $85.6 million (€79.2 million) relating to its exit from Russia earlier in the year, according to a recent news release.

The German group had announced the sale of its tires and automotive parts manufacturing operations in Kaluga, Russia to S8 Capital in May.

"In the second quarter, all Russian operations in the Tires segment and some Russian operations in the ContiTech segment were sold," said Continental in its Aug. 9 quarterly report.

A purchase price of about $84 million was paid in cash; however, the "carrying amounts of outgoing net assets" amounted to $87.8 million, according to Continental.

The figure, it said, included $80 million for the full impairment of all intangible assets as well as property, plant and equipment. The elements included impairment on property, plant and equipment of about $74.5 million in Tires and about $5.5 million in ContiTech.

Post-divestment, Continental said "only immaterial operations" in the Automotive and ContiTech segments remained in Russia.

Continental produced passenger car tires at Kaluga, with air conditioning, power-steering and air suspension parts/systems for the Russian market also made there.

Following the sale, Continental still owns shares in a 10-employee JV with Russian company Mettem to produce tachographs in Chistopol, Russia.