Barloworld, which has business interests in Russia, has been an official Cat dealer since 1927.
Barloworld lost more than 15% of its value – R3 billion of its market value – in less than a week as the market assessed the impact of the Russian invasion of Ukraine on its business.
Barloworld has been in Russia since 1998. Barloworld subsidiary Vostochnaya Technica is the official dealer for CAT construction, mining and industrial machinery in large parts of Russia.
The company’s financial statements for year ended 30 September 2021 showed that Russia contributing around R8.4 billion in revenue, representing 20% of Barloworld’s revenue from continuing operations.
On Tuesday, Barloworld said it would continue to monitor developments in that country as events unfold and “contingencies are put in place to deal with the developments”.
For now, the company says its business in Russia won’t be affected by the money transfer ban imposed against some Russian banks in the wake of the country’s invasion of the Ukraine.
Some Russian banks have been blocked from the global payment system SWIFT. Banks use the secure SWIFT message system to make cross-border payments.
Barloworld said the SWIFT payment system ban won’t impact it as all its payments from customers were conducted through the Russian central bank system.
“Barloworld does not use banks that have currently been barred from the SWIFT system.
“Barloworld does not have excess cash in Russia at this point in time and has sufficient funding facilities to run VT LCC”.
On Tuesday afternoon, Barloworld’s share price was down almost 5% to R117.
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