Page 111 - RusRPTAug19

preparing to move Renova into Russian jurisdiction, as well as attempts to minimise impact of sanctions, possible inclusion of construction projects that would require larger capital, or tax optimisation.
Severstal steel major acquired 26% stake in the joint venture of Linde Gas Rus and Power Machines machinery and engineering major (Linde- Power Machines JV). Both Severstal and Power Machines are controlled by tycoon Alexei Mordashev. Initially, the JV was 50/50 until the US sanctioned Power Machines in May 2018, BCS Global Markets reminds on July 4. "Consequently, their stake in the JV was reduced to 26%, which is now being sold to Severstal." Linde-Power Machines produces spiral heat exchangers for LNG production. The value of the deal was not disclosed, but in 2017, Linde’s annual report said the JV had an equity value of €3.2mn. BCS sees the deal as immaterial for Severstal. The company "bought a non-core asset from the key shareholder and questions about ‘sanctions’ will be arising, but we believe the deal’s value is immaterial for Severstal and the purchase has no risk of US sanctions." Power Machines is preparing to enter the race for getting state support for gas turbine production and has recently been split into four entities, reportedly to diffuse sanction risks.
111 RUSSIA Country Report August 2019 www.intellinews.com