Friday July 12, 2024

Putin strips foreign firms from management of St Petersburg airport

Published : 01 Dec 2023, 23:37

  DF News Desk
Russian President Vladimir Putin listens during a meeting of the Congress of Young Scientists at the Sirius Park of Science and Art at Sochi in Russia on Wednesday. Photo: Kremlin via dpa.

Russian President Vladimir Putin has ordered a new management structure for Pulkovo Airport in St Petersburg, forcing the major German shareholder Fraport out of the business, reported dpa.

In a decree published late Thursday, Putin justified the move with "unfriendly actions of some foreign states and international organizations."

Fraport had held 25% of the Pulkovo Airport's previous operating company, the Cyprus-registered Northern Capital Gateway (NCG) consortium.

A total of 13 different companies belonged to NCG, which was awarded a 30-year contract in 2010 to operate Pulkovo Airport until 2040.

Putin's action moves 100% of the stakes in NCG to a new domestic holding company established by the Russian government, resulting in foreign firms like Fraport losing their investor rights.

Western companies withdrew en masse from the Russian market after Moscow launched its all-out invasion of Ukraine in February 2022. Many sectors of the Russian economy are subject to sanctions.

In retaliation for the Western sanctions, Putin has used various methods to seize control over the operations of foreign firms in Russia.

The new measures regarding Pulkovo Airport were taken "in connection with the threat to the national interests and economic security of the Russian Federation," according to Putin's decree.

Fraport had declared its intention to divest from the operation of the airport. Last year, after the war erupted, it said its business at the airport had been "suspended."

In September, the head of the Russian bank VTB, Andrey Kostin, said that the parameters of Fraport's exit should be determined by the end of this year. He stated the value of Fraport's stake at €111 million ($120 million).

On Friday morning, Fraport noted that its business at the airport was already "on hold" and that it was still working to determine the consequences of Putin's move.