Fraport's Departure from Pulkovo Leaves Hesse in the Dark
Turns out, Fraport has bid adieu to Pulkovo Airport in St. Petersburg, leaving the Hesse government yearning for more concrete details from the Russians. It seems the Hessian finance minister found out about this shake-up from the media itself, as stated by State Secretary Martin Worms in the state parliament's financial committee this week. At the moment, it appears that Fraport's shares and overall performance elsewhere remain unaffected. During their time in St. Petersburg, Fraport had managed to garner a modest profit.
Guess who's the one calling the shots now? None other than Russian President Vladimir Putin. He's ordered a new operating structure for Pulkovo, ultimately forcing Fraport out of the game. Initially, they held a 25% stake in the operating company for the airport in St. Petersburg.
Worms, in his official statement, likened the situation to a "dictator's dictatorship." It's still unclear whether this constitutes an "expropriation" for Fraport. They've been ousted from the operating company of Pulkovo Airport and thrown into a new, yet unnamed, holding company for the time being. The Hessian Ministry of Finance is just as in the dark as the rest of us, waiting on a formal decree from Russia.
Jan Schalauske, the outgoing head of the Left Party in the Hessian parliament, agreed that the situation possibly tarnishes Fraport's reputation, given numerous reports of military use at Pulkovo. Russia has been engaged in a war of aggression against Ukraine for almost two years now.
Consequences have followed for Western companies doing business in Putin's vast empire. Many sectors of the Russian economy are currently subject to Western sanctions due to the conflict. In a bid to secure factory and company operations while saving jobs, Putin has frequently resorted to forced administrations.
In the aftermath of the conflict, Fraport announced their intentions to depart from Pulkovo Airport operations. Recently, Andrey Kostin, head of Russian bank VTB, estimated the value of Fraport's stake to be 111 million euros. Regrettably, the Hessian Ministry of Finance refuses to confirm this figure. Instead, they clarified that the investment had been written off and recorded a zero asset value in Fraport's balance sheet.
It seems that major airports across Germany, including Frankfurt, have temporarily banned Russian airlines in response to the Russian government's actions. Like a domino effect, this affects Fraport's international operations, potentially rocking the company's standing in the industry.
Related Content:
- Despite Fraport's departure from Pulkovo Airport, there's been no notable impact on the company's share price so far.
- The Hessian finance ministry is seeking more information from the Russian government about Fraport's ousting from the operating company of Pulkovo Airport.
- Putin and the Russian government have mandated a new operational structure for Pulkovo Airport, which led to Fraport's exit.
- The potential damage to Fraport's reputation due to military activities at Pulkovo Airport has been expressed by the head of the Left Party in the Hessian parliament.
- Western companies have been exiting Russia's markets en masse since Putin ordered forced administrations for factories and companies in response to Western sanctions.
- The Hessian Ministry of Finance has confirmed that Fraport has written off their investment in Pulkovo Airport, with no asset value in their books.
- Fraport's former stake in Pulkovo Airport, valued at 111 million euros by Russian bank VTB, goes unacknowledged by the Hessian Ministry of Finance.
