With the beginning of the Russian invasion of Ukraine, the departure of American companies and corporations from Russia became literally a case of honor: Apple and Google deprived Moscow of their payment systems, McDonalds literally shocked the Russians after 32 years of operation in the country, announcing the sale of business throughout the country, the corporation Ford announced its resignation and announced financial assistance to the fund to support Ukrainians, General Motors left back in April, and became the first foreign automaker to leave Russia.
The list can go on and on, and it will be replenished, because those who do not immediately feel pricks of conscience experience a certain amount of political pressure from the presidential administration – until recently, KFC remained in Russia, Burger King and other franchisees operate, there are companies with participation of American capital, from which our investment funds and corporations continue to receive profits (these are retail companies, and tobacco brands, etc.).
There are situations that are more complicated, for example, when a company, at first view, does not have any relation to the United States, but is owned by an American investment fund, one of these situations has already received unpleasant publicity: the Swedish publication Dagens Industri talks about the Malmö-registered bed manufacturer Hilding Anders, which owns 73% of the shares of the Russian company Askona. Askona is one of the largest players in the impressive Russian market for sleep products, producing about 10,000 mattresses daily. An analysis by the London company Reorg shows that Askona makes 52% of Hilding Anders’ total profit, the concern’s factories in Russia produced beds for Ikea and Jysk, they are sold under their own brands.
The twist is that Hilding Anders is owned by the American venture capital giant KKR – a truly risky investment! However, the Russian press, emphasizing the attractiveness of the domestic market and the “normal” state of affairs on it, is happy to cover the presence of KKR capital in Russia: the Swedish concern is investing about a hundred million dollars at the current rate of the Russian regulator in Askona to modernize production. This includes expanding the sales range, optimizing IT tools, purchasing new equipment, and more. Against the background of the mass exodus of American, and in general, international companies, these investments look encouraging for the Russian market, at least in the media.
However, such spending is not so encouraging in a hopeless market of stock players – Hilding Anders has been leveraged for a long time, and most of its borrowing consists of a €500 million exchange loan maturing at the end of 2024, it is traded on Bloomberg, and its the price has already fallen from 80 to 49 euros since the start of the war.
On the one hand, there is no point in giving up the Hilding Anders asset, which gives the greatest profit, on the other hand, its toxicity is obvious, which is already manifested not only in a theoretical aspect, but also in quite specific stock quotes.
And in the current conditions, despite the strategy of strengthening the presence of KKR in the Nordic countries, the fund is unlikely to be able to help Hilding Anders with its injections (it is one thing to silently receive income, another to make large public investments), which will force the Swedish company to look for a way out of the situation on its own, having a reputation for supporting aggression in Ukraine of a company. Analysts agree that Hilding Anders will face difficulties in meeting its obligations to banks, as a result, KKR will be forced to give up control of the toxic asset.
Hilding Anders itself is in a somewhat “disassembled” state: the Swedish author notes the constant changes in the CEO and strategies, the company’s head office is located in Malmö, but a number of functions were transferred to Copenhagen – even the response to the publication’s request was given not by the press secretary, but by the manager of staff.
In the meantime, the KKR investment fund continues to receive its income from Russian assets, despite all the sanctions imposed against Moscow, and it looks like only financial difficulties will force it to leave the ownership of the HA stake.
Americans, meanwhile, bear the brunt of that same “Putin tax,” feeling inflation, astronomical fuel prices, and other consequences of breaking economic ties that big business so cynically avoids. European depositories have been banned from providing any services to Russian citizens and organizations, and Americans who have invested in Russian securities will not receive any income either. But the funds did not cheat themselves by showing such duplicity, therefore, no moral and ethical considerations will force KKR to abandon toxic Russian profits – only financial difficulties that inevitably await Hilding Anders can lead to this.
The text was prepared based on the materials of Forbes