By Mauro Orru

Russia ordered the transfer of rights to manage Saint Petersburg's Pulkovo airport from foreign shareholders like Germany's Fraport to a new entity, the latest seizure by the Kremlin of assets in which foreign groups still have interests.

President Vladimir Putin on Thursday signed a decree that effectively transfers the stakes that foreign investors own in Northern Capital Gateway--the company that operates Pulkovo airport--to a new entity, VVSS Holding. Fraport owns a 25% stake in Northern Capital Gateway as part of a 30-year concession agreement that was signed in 2009 to operate and expand the airport.

While Fraport and other shareholders, including Qatar's F3 Holding and Emirati Thirty Seventh Investment, still hold their stakes in the new entity, according to the decree, their voting rights are now controlled by VVSS's management.

The decree said the move was in response to "the threat to the national interests and economic security of the Russian Federation" and violations by some foreign investors of obligations related to the management of Northern Capital Gateway, though it didn't elaborate.

A Fraport spokesman said the group was working to verify the information from the decree and assess what it means for its involvement in Saint Petersburg, pointing out that the company had suspended its participation in the airport operating company since the beginning of Russia's invasion of Ukraine.

Still, the latest move by the Kremlin highlights the risks to Western companies with interests in Russia more than a year after the war began. In April, Russia decreed that the state can take temporary control of assets of companies or individuals from what the Kremlin calls "unfriendly" states.

In April, Russia took control of the assets of Germany's Uniper and Finland's Fortum in the country, handing the stakes in their Russian subsidiaries to a government agency. In July, Russia appointed Chechnya's agriculture minister as the new head of Danone's business in the country and tapped a Russian businessman to run Carlsberg's operations there.

Russian officials have said that the seizures were in retaliation for similar moves by Western countries and that more companies could be targeted. Many Western companies have struggled to wind up their operations in Russia and the latest asset seizures--and now management changes--serve as a warning shot to those still looking to exit.


Write to Mauro Orru at mauro.orru@wsj.com


(END) Dow Jones Newswires

12-01-23 0754ET