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05.08.2025
PUT OPTION (REVERSE BUYBACK) BY FOREIGN INVESTORS - AMENDMENTS ARE APPROVED
On July 22, 2025, the State Duma adopted in the second and third readings amendments to the Law on the Specifics of Regulating Corporate Relations in Business Entities Classified as Economically Significant Organisations.
The amendments establish grounds for denying returning foreign investors the right to exercise a put option (reverse buyback). Five conditions must be met for such denial:
- the investor is associated with unfriendly countries;
- the shares were disposed within the period from February 24, 2022 to March 1, 2025;
- the transaction price was significantly below market value;
- at least two years have passed since the contract was concluded;
- the Russian purchaser has been fulfilling obligations to employees and creditors in good faith.
The investor shall have the right to claim compensation from the purchaser, but no later than one year from the date of the refusal to exercise the option.
If the investor has a significant impact on Russia’s socio-economic development, the state may prohibit the reverse buyback.
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