President Putin signed a decree placing 3 additional JT local subsidiaries under temporary state management, bringing the total to 7 companies together with the 4 manufacturing companies already covered. JT confirmed that the scope of the impact had expanded and said it was considering its response.
The Russian government issued an additional presidential decree on the 6th placing 3 local subsidiaries of Japan Tobacco (JT) under temporary state management, announcing a policy to place a total of 7 companies under management, including the 4 already covered. The 3 newly covered companies are said to handle sales, corporate management and holding-company functions, and will come under the management of industrial assets.
JT announced on the 6th that it had confirmed that 4 manufacturing companies were subject to temporary management. It said it would disclose details of its response and the impact on the group as soon as matters requiring disclosure became clear.
The Russia business accounts for approximately 10% of total JT Group revenue and approximately 25% of adjusted operating profit. Its share of the Russian market is approximately 35%, ranking first. There are 4 production sites in Russia, with approximately 4,000 employees.
In the stock market, JT shares ended trading on the 6th down 19.3% from the previous day’s close. They also traded below the closing price in PTS trading. The government’s protest and the expansion of the scope of the measures are believed to have had a significant impact on investor sentiment.