Photo: SEJ
The leading search engine in Russia could face its downfall as financial ramifications from the attack on Ukraine escalates.
Yandex, which manages around 60% of Russia’s internet search service and handles a huge motor pool business, announced Thursday that it might be incapable of paying off its debt due to the financial market relapse sparked by the US’ severe sanctions.
While the Netherlands is the company’s base, its shares are Nasdaq- and Russian stock exchange-listed. However, stock trading has been halted this week as the value of the Russian assets dropped in Moscow and worldwide amid the invasion.
The sanctions placed by the United States, European Union, and other leading Western economies over the weekend mounted on the adversity.
Yandex has not been included in the sanctions; however, it could well be included. If share trading on Nasdaq is impeded for over five days, investors who possess $1.25 billion convertible notes in Yandex have the right to claim repayment in full; interest could also be added.
According to reports from Russian state news agencies on Friday, the Russian stock market will stay closed approximately until Tuesday.
In a statement, the company said, “The Yandex group as a whole does not currently have sufficient resources to redeem the Notes in full.”
Russia’s largest lender, Sberbank, was propelled to shut its European branch earlier this week due to the Russian central bank blocking them from sending money to its subsidiary in Vienna after a run on deposits.
“In the event that we were prevented from distributing additional funds from our Russian subsidiaries to our Dutch parent company, Yandex would not have sufficient resources to redeem a majority of the Notes,” said the company. As a result, it poses a massive impact on its capacity to compensate for its financial responsibilities.
“We are currently conducting contingency planning to determine what steps we would take in this regard and what other sources of financing would be available to us in the event that this redemption right is triggered,” added Yandex.
Yandex, which possessed around $17.4 billion market value earlier in February, revealed reports of its revenues at 356 billion rubles in valuation in 2021, currently equal to a bit over $3 billion following the drop in the Russian currency.
