Russia’s biggest search engine could fall apart after Russian invasion of Ukraine. Yandex, responsible for about 60% of Internet search traffic in Russia and operating a high-capacity business, said on Thursday that it may be unable to repay its debts as a result of the collapse of the financial market provoked by the unprecedented sanctions of the West.
The company is based in the Netherlands, but its shares are listed on Nasdaq and the Russian stock exchange. Trading in the papers was suspended this week as the value of Russian assets plummeted in Moscow and the world after the invasion. The imposition of sanctions by the United States, the European Union and other major Western economies last weekend added even more pressure.
Yandex has not entered the sanctions, but this could still happen. Investors who hold $1.25 billion in Yandex convertible notes are entitled to demand a full refund, plus interest, if trading in their shares is suspended on Nasdaq for longer. of five days. The Moscow stock exchange will remain closed until at least Tuesday (8), as Russian state news agencies warned on Friday.
“The Yandex group as a whole does not currently have sufficient resources to utilize the notes in full,” the company said in a statement.
Another difficulty is the withdrawal of money from its main companies operating in Russia to rescue the Dutch parent company, thanks to Western sanctions and capital controls introduced in recent days by the Russian government with the aim of preserving precious foreign currency reserves and avoiding international companies to drain their assets.
The Sberbank. Russia’s biggest creditor bank was forced to close its European arm earlier this week after it was blocked by the Russian central bank from sending money to the Vienna branch in the wake of 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 utilize most of the notes,” the technology company said. This could affect your ability to meet other financial obligations.
“We are currently making contingency plans to determine what measures we would take and what other sources of funding would be available to us in the event that the redemption right is triggered,” he added.
The crisis in Ukraine poses another threat to its business. Western companies are suspending the provision of technology and services to Russian customers. A prolonged suspension of hardware or software sales could harm Yandex over time.
“We believe that our current data center capacity and other operations-critical technologies will allow us to continue operating in the normal course for at least the next 12 to 18 months,” the company said.
With a market cap of around US$17.4 billion (approximately R$88 billion) at the beginning of February, Yandex reported income of 356 billion rubles in 2021, which is now equivalent to just over R$17 billion. after the collapse of the Russian currency.
In 2018, the company created a joint venture with Uber to combine its activities in Russia and neighboring countries.
Uber sold its share of Yandex last year, while leaving the Yandex Ears and Yandex Delivery businesses.
On Monday, Uber said three of its executives would step down from the board of directors of its joint venture with Yandex, according to Reuters.
“We are actively looking for opportunities to accelerate the sale of our remaining stakes, and in the meantime, we will be removing our executives from the joint venture’s board of directors,” an Uber spokesperson said.
Source: CNN Brasil

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