Yandex: the Russian search engine warns that it could be lacking
Russia’s largest search engine could collapse due to financial fallout from invasion of ukraine spreads.
(YNDX)which handles around 60% of Russia’s internet search traffic and operates a major ride-sharing company, said on Thursday it may be unable to pay its debts due to the financial market meltdown triggered by the unprecedented crisis in the West. punishments.
The company is based in the Netherlands, but its shares are listed on Nasdaq and the Russian stock exchange. Trading in the shares was suspended this week as the value of Russian assets plummeted in Moscow and around the world following the invasion. The imposition of sanctions by the United States, the European Union and other major Western economies over the weekend has increased the pressure.
Yandex was not sanctioned but it could still default. Investors who hold $1.25 billion in Yandex convertible bonds have the right to demand full repayment, plus interest, if trading in its shares is suspended on the Nasdaq for more than five days. The Moscow stock exchange will remain closed at least until Tuesday, Russian news agencies reported on Friday.
“The Yandex Group as a whole does not currently have sufficient resources to fully redeem the notes,” the company said in a statement.
It may also find it difficult to withdraw cash from its main operating activities in Russia to bail out the Dutch parent company due to Western sanctions and capital controls introduced by Moscow this week aimed at preserving precious foreign currency reserves. and to prevent international companies from giving up their assets.
(SBRCY)Russia’s biggest lender, was forced to close its European branch earlier this week after the Russian central bank was blocked from sending money to its Vienna-based subsidiary following 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 the majority of the tickets,” the technology company said. This could affect its ability to meet other financial obligations.
“We are currently conducting contingency planning to determine what steps we would take in this regard and what other sources of funding would be available to us, in the event that this redemption right is triggered,” he added.
The crisis in Ukraine poses another threat to its business. Western companies stop providing technologies and services to Russian customers. A prolonged suspension of hardware or software sales could harm Yandex over time.
“We believe that the current capacity of our data center and other technologies essential to operations will allow us to continue operating normally for at least the next 12 to 18 months,” Yandex said.
Yandex, which had a market value of around $17.4 billion at the start of February, reported revenue worth 356 billion rubles in 2021, now equating to just over $3 billion after the collapse of the Russian currency.
In 2018, he created a joint venture with Uber to combine their carpooling activities in Russia and neighboring countries.
Uber said on Monday that three of its executives would leave the board of directors of its joint venture with Yandex, Reuters reported.
“We are actively seeking opportunities to accelerate the sale of our remaining stakes and, in the interim, we will remove our executives from the joint venture board,” an Uber spokesperson said.