One of Russia’s richest men, billionaire businessman Alexey Mordashov, will split his sanctions-hit power engineering business, Power Machines, into four companies as part of a new strategy, Reuters reports.
Mordashov’s company, Power Machines which spans engineering and manufacturing equipment for thermal, nuclear and hydropower plants, was hit by U.S. sanctions last year. Severgroup, which manages Mordashov’s investments, said in a statement on Friday that some of the assets of Power Machines will be transferred to a new management company, of which Mordashov will be in charge.
Power Machines is the Russian partner in Siemens Gas Turbine Technologies, a St Petersburg-based joint venture, in which Germany’s Siemens has a majority stake.
Washington imposed sanctions on Power Machines when it updated the list of companies and officials related to supplies of German turbines to Crimea, the peninsula annexed by Russia from Ukraine in 2014.
Mordashov’s representative told Reuters the decision to reorganize Power Machines was not related to the sanctions.
The need for the reorganization was long overdue, Severgroup said in the statement.
“The current business model of Power Machines, based on a rigid vertical management of all operational processes, does not allow for flexible responses to market changes, quickly mastering new technologies, and dynamically developing new promising areas,” it added.
Power Machines will be divided into four product divisions – large generation, small and medium generation, heat exchange equipment and electrical engineering.
A new company, NordEnergoGroup, has been created to manage the assets, and Mordashov will be its head. The reorganization will take place gradually this and next year, the statement said.