Hyundai sells $220 million Russian plant for just $111

Hyundai Motor will sell its Russian production plant which halted operations after the country invaded Ukraine.

Hyundai Motor's manufacturing plant in St. Petersburg, Russia. [JOONGANG PHOTO]

Hyundai Motor will sell its Russian production plant, which halted operations after the country invaded Ukraine, for $111 with a two-year buyback option.

According to Hyundai Motor's regulatory disclosure, the carmaker's board of directors on Tuesday approved the sell-off of its entire stake in Hyundai Motor Manufacturing Rus (HMMR) production plant in St. Petersburg, citing "the persisting condition that made it impossible to operate the plant."

Russia's Art-Finance will buy the plant for 10,000 rubles, or $111, according to the company. Hyundai is currently making final arrangements with Art-Finance for details of the deal, which is to be completed by Dec. 28.

The plant is worth 287.3 billion won ($219.3 million).

The sell-off agreement incorporates a buyback option, providing Hyundai with the opportunity to repurchase the facility within two years after the sale.

The Russian plant halted production in March last year due to difficulties with the supply of components after Russia’s war with Ukraine.

Earlier this month, Hyundai extended the suspension of the HMMR plant until the end of December.

The Russian plant, which was completed in 2010 and began production a year later, has a production capacity of 230,000 vehicles. Popular models such as Solaris sedans and Creta SUVs used to be manufactured at the plant.

Hyundai's sales in the country sharply dropped since the Russia-Ukraine war as it sold only 738 vehicles in Russia in the first quarter, down 98 percent on year, according to data from the Association of European Businesses.

However, Hyundai said that it will continue to provide after-sales services and other customer care businesses for Hyundai owners in the country.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]