Barloworld says Russia operations have sufficient facilities to operate

1st March 2022 By: Schalk Burger - Creamer Media Senior Contributing Editor

Heavy-duty equipment multinational Barloworld says all local payments from customers in Russia to its Russian operation Vostochnaya Technica (VT) are effected through the Russian central bank system.

It adds that it does not use banks that have currently been barred from using the SWIFT system.

Further, Barloworld does not have excess cash in Russia at this point in time and has sufficient funding facilities to run VT.

Additionally, most of VT's customer contracts are executed with reference to the dollar and settled in ruble equivalent.

VT is part of Barloworld’s Equipment Eurasia business, which represents the group’s combined UK, Russian and Mongolian operations. VT is present in Western and Eastern Siberia, Yakutia, as well as part of the Russian Far East.

In the most recently reported results for the year ended September 30, 2021, the Equipment Eurasia total revenue was R10.7-billion, or $718-million, with Russia contributing 78% of Equipment Eurasia’s revenue and 20% of the group’s revenue from continuing operations.

"The group continues to engage with employees, partners and clients regularly. The sanctions that have been communicated through the news feeds, once legislated, will enable Barloworld to estimate the impact and adjust its response plans accordingly," it says.

"Barloworld will continue to draw on the group’s experience from the historic events that created financial uncertainty in Russia in 2014 and previously in Angola and adapt to the current environment as circumstances dictate.

"The group is mindful of the sanctions that are currently being imposed by the US, the UK and the European Union and we are monitoring all these developments that might affect our suppliers, customers and the company."

The group will continue to monitor developments and communicate appropriately with stakeholders as events unfold and contingencies are put in place to deal with developments, it adds.

Barloworld will release a voluntary pre-close update on March 29, 2022.