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BASF Takes Huge Writedowns as Unit Exits Russia

The chemicals maker is taking a $7.9 billion hit.

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BERLIN (AP) — Germany-based chemicals maker BASF says it is taking some 7.3 billion euros ($7.9 billion) in write-downs related to the exit from Russia of its Wintershall Dea gas and oil subsidiary.

Wintershall Dea said late Tuesday that it "intends to fully exit Russia in an orderly manner complying with all applicable laws and regulations." The unit's CEO, Mario Mehren, said in a statement that "continuing to operate in Russia is not tenable."

"Russia's war of aggression in Ukraine is incompatible with our values and has destroyed cooperation between Russia and Europe," he added. He also pointed to restrictions imposed by the Russian government on the operations of Western countries and "external interferences in our joint venture operations."

Parent company BASF said in its preliminary 2022 earnings statement that it was taking charges on its holding in Wintershall Dea totaling about 7.3 billion euros, 5.4 billion euros of them in the fourth quarter of last year.

It said that is expected to push it to a full-year net loss of nearly 1.38 billion euros, compared with a profit of more than 5.5 billion euros in 2021.

BASF said that "the Russian participations of Wintershall Dea have been re-evaluated and write-downs on the European gas transportation business have been made, including a complete write-down on the participation in Nord Stream AG."

Wintershall Dea has a 15.5% stake in the operator of the Nord Stream 1 pipeline that runs under the Baltic Sea, which is majority-owned by Russia's Gazprom.

The pipeline transported natural gas from Russia to Germany until the end of August. Russia hasn't supplied any gas to Germany, one of the countries giving military and other help to Ukraine in the war, since then.

Undersea explosions damaged Nord Stream 1 in September. Investigators have described them as an act of sabotage, but have not said who they think might be responsible.

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