Broadliner ELKO Group has announced that it had stopped not making deliveries to Russia and is considering options to exit the Russian market.
Since the beginning of the war in Ukraine, €2b Latvia-based ELKO Group has stopped deliveries of IT equipment and household appliances to the Russian market, just shy of 3 years after the acquisition of €300m local distributor Absolut Trading.
"ELKO Group respects and will continue to comply with all sanctions: partner-, product- and transaction-related. As a result of these sanctions, the supply chain and the movement of goods to Russia has been suspended", explains Svens Dinsdorf, the CEO of the distributor.
Currently, with the help of financial and legal experts, options are being developed for ELKO Group’s concern to withdraw from assets registered in Russia so that any actions taken would be in accordance with the law and would fulfil all obligations to bondholders, financial and other partners. This process is legally complicated, and ELKO Group's ability to comment on these activities in detail is limited due to the laws and regulations governing the stock market.
ELKO's Russian subsidiary generated a turnover of €460,33m in 2018, that is without Absolut Trading. This means its global activity in the country weights roughly one third of its global turnover.