7Disposal group held for sale

On May 24, 2022, the group announced its intention to exit the Russian market and initiated an active program to find a buyer for four legal entities in the country. The Russian business is comprised of entities with operations in the reporting segments Flow Equipment, Services and Chemtech and includes two service centers and one production facility. Negotiations are ongoing with potential buyers, with deal closure expected in late 2022 or early 2023, pending finalization of negotiations and obtainment of any required regulatory approvals. The assets and associated liabilities of these operations expected to be transferred as part of a sale have therefore been classified as held for sale in the interim period ending 30 June, 2022. 

A disposal group classified as held for sale is measured at the lower of its carrying amount and fair value less costs to sell. Upon the classification as held for sale, write-downs of CHF 88.9 million were recorded, with CHF 32.2 million recorded in other operating expenses, CHF 38.8 million in cost of goods sold, CHF 15.7 million in general and administrative expenses, and CHF 2.2 million in the income tax expenses line. The write-downs include mainly impairments of goodwill, other intangible assets, property, plant and equipment, and write-down of inventory. The fair value less costs to sell reflects the estimated net selling price of the disposal group; the estimate is based on the current status of discussions with potential buyers.

Other comprehensive income as of June 30, 2022, includes CHF 4.3 million to be reclassified to the income statement at the date of the sale. The assets and liabilities classified as held for sale as of June 30, 2022, are presented in the following table: 

Whereas the cash and cash equivalents classified as held for sale can be used without restriction in the respective country, they are not available for general use by other entities within the group.