Further to our press release of 3rd May 2023, the Directors of ABH Holdings S.A. ("ABHH") are of the opinion that it is no longer feasible to simultaneously conduct business in Russia and Europe and that we, as a European company, would benefit from reducing our exposure to the Russian assets.

We understand that our position is in line with the approach taken by the European Union who have imposed 11 packages of sanctions that are clearly intended to cripple Russia’s economy and discourage European businesses from transacting with, or owning, Russian entities. Furthermore, according to the recent European Court of Justice decisions, it is clear that continued ownership of Russian assets is the principal reason for not lifting the sanctions.

The largest asset indirectly owned by ABHH, through the Cyprus company ABH Financial Limited ("ABHF"), is Alfa-Bank Russia. In accordance with the objective to remove Russian assets, we were informed by ABHF that, on 16 February 2023, an agreement was signed pursuant to which Alfa-Bank Russia would be sold on market terms. The agreement contains a number of conditions, including receiving clearance from the Ministry of Finance of the Republic of Cyprus. Until this and all other conditions have been satisfied, the sale cannot proceed to completion.

Almost 7 months have now passed since the formal application was submitted, however the approval is still pending, and the status of the application remains unclear due to the lack of formal response from the Unit for the Implementation of Sanctions in the Financial Sector of the Ministry of the Republic of Cyprus ("MEK"). Despite the good faith attempts by ABHF to engage with MEK, unfortunately, the transaction clearance process has not progressed to date, as no decision or even a clear guidance was provided. In this regard, we contacted not only the Cypriot regulator, but also the EC leadership in August 2023, but no response has been received so far.

Consequently, an extremely contradictory situation has emerged: on the one hand, the EU expects European businesses to withdraw from the Russian assets, while on the other hand EU regulatory authorities do not provide permission for the exit.

We hope that this press release will help draw attention to this situation.