(Reuters) - Inchcape said on Thursday it has agreed to sell its Russian business to local management as the British car distributor exits Moscow following Russia's invasion of Ukraine.
The sale will result in an exceptional non-cash loss before tax of about 240 million pounds ($300 million), of which 140 million pounds is due to accumulated foreign exchange translation losses, Inchcape said.
The company said the sale of the Russian business — which consists of retail-only operations, mainly for BMW Group, Jaguar Land Rover, Toyota and Volvo in Moscow — for 76 million euros ($79.92 million) is expected to close next month.
The business contributed about 10% of group sales in 2021 and the company said last month it was working to exit Russia. Its shares rose 2.9% in early trading.
The payment of the purchase price will be deferred and satisfied over a period of five years through annual instalments, it added.
The London-listed firm in March said it had started transitioning its Russian business after noting ownership interests in the country were "no longer tenable" amid Western sanctions on Moscow following the invasion.
Inchape, which announced the sale along with its first-quarter update, reported a 13% jump in first-quarter revenue as robust car demand and higher pricing helped it offset supply chain snags in the industry.
It expects higher full year 2022 pre-tax profit of at least 300 million pounds, up 25% from a year ago.
"So far in 2022 we have experienced a continuation of the trends from last year, with demand ahead of supply, and high margins. We expect this trend will continue for at least the remainder of the year," Inchcape said.
($1 = 0.7990 pounds)
($1 = 0.9509 euros)