Philip Morris, a tobacco company, admits that it might never sell its Russian business.

Philip Morris International admitted that it would rather keep its Russian business than sell to the Kremlin on strict terms. This highlights the difficulties for companies looking to leave Russia without taking a major financial hit.

Jacek Olczak, chief executive, stated that the tobacco group, which is known for selling Marlboro cigarettes in other countries, had been in talks with at least three potential buyers, but that “the talks have stalled” because “nobody knows how to make it work”.

Many western companies pledged to leave Russia after the invasion by Ukraine last year, but less that 9% of EU and G7 countries had left by December 31, according to research conducted by the International Institute for Management Development (a business school).

Olczak’s remarks highlight the bureaucratic challenges for companies seeking to sell Russian assets. They also point out the potential cost of losing access to the country’s lucrative market for tobacco groups like PMI.

He stated that he had a “duty” to his shareholders to recover value. He pointed to regulations that allow Russia to determine the valuation of foreign companies selling Russian assets, as well as the new owner’s dividend and cash flow.

According to company filings, although the asking price of PMI’s Russian operations is not known, the group owns assets worth $2.5bn in Russia.

“I can’t lose my patience and leave it. Olczak stated that it is their money and not mine. “If I had a buyer that could execute the transactions, yes, we would do it. But it doesn’t exist. . . There is no hope. . . Then, I would rather keep the whole thing.

Some of the most prominent names in international business have fled the country as the first anniversary of the February 24th invasion approaches.

Energy companies, from BP and Shell to ExxonMobil to Equinor, have either ended joint ventures and/or written down their remaining shares to zero. Societe Generale, a French lender, is the largest to have withdrawn. Nearly all foreign carmakers that have plants in the country are either sold out or have walked away.

However, Raiffeisen and UniCredit, European banks, and Unilever and Procter & Gamble remain in the country. Both consumer groups claim that they have reduced their operations.

Imperial Brands, which made Davidoff cigarettes and cigars, sold its Russian operations to an international partner shortly after the invasion. This resulted in a $463mn loss to annual profits.

This contrasts with other tobacco companies. Japan Tobacco is not planning to leave, and British American Tobacco has had difficulty selling the product. However, it stated this month that it was in “advanced discussions”.

Russia is a market that Big Tobacco has been very successful in because of its high smoking rates and willingness to use vapes or heated tobacco products. It accounted for 8% of PMI’s $31.7bn revenue last year, along with Ukraine.

Marlboro is not the only product sold by the company. It also sells cigarette brands such as Chesterfield and L&M. The company also owns IQOS, a smoke-free tobacco product. Recently, Swedish Match, which makes the Snus oral nicotine packet, was purchased by the company for $15bn.

“I know some people. . . We may think we make a decision to not leave but we haven’t made any decisions since. . . Olczak stated that we could not execute the decision. “When I say that I’m leaving or not, it’s irrelevant. I tried last year, and the truth is I’m stuck with this whole thing.”

PMI admitted this month that it does not expect to sell Ukraine and Russia, but did so in tacit recognition. It has stopped new investments and reduced operations in the country.

Olczak stated that he would request a buyback clause for Philip Morris if it sells its Russian assets. This will allow him to return the Russian assets if war ends. He said that this goal did not slow down the process.

Danish drinks company Carlsberg stated this month that it was also looking into a buyback clause in the nearing Russia exit deal.

Olczak retorted to criticisms, including from the Ukrainian government. He said that PMI, by not leaving Russia immediately, is helping to finance the Kremlin’s war effort.

“I don’t support anyone. I get caught in this situation and it is a trap. . . What’s the best way to get out?

The four major tobacco conglomerates had paid $7.8bn annually in taxes to the Kremlin before the war.

Analyst at Panmure Gordon Rae Maile said PMI’s exit was slowing down because it was “bloody complex” and that the group was trying “to extract as much value for shareholders.”