Russia’s Yandex warns shareholders of potential default

Friday - 4 March 2022, 10:22

Against the background of sanctions against Russia, Yandex warned shareholders about the risks of default after the suspension of its trading in securities.

Source: Yandex

Statement: "We are currently analysing new export controls and working closely with our suppliers. None of the Yandex Group companies are working in the defence, aerospace or maritime sectors that have been specifically targeted.

"However, we understand that a number of companies based in the US, UK, EU and elsewhere have indicated that they are currently suspending supplies and services to customers in Russia.

"We believe that the capacity of our data centre and other important technologies will allow us to continue to operate normally for at least the next 12-18 months. In the event of a prolonged suspension of supplies of equipment, software or other technologies used in our business or offer– if we cannot find alternative sources, over time, our activities may suffer a significant impact.

"In addition, we understand that many suppliers have announced their intention to suspend the sale of consumer goods to Russia, and several large shipping companies have suspended supplies to Russia; such actions, if they continue, will reduce the number and choice of goods that we can offer through Yandex.Market."

Yandex also warned that bondholders have the right to demand redemption of bonds worth $1.25 billion at face value and accrued interest after the suspension of trading on the Nasdaq for more than five trading days.

Nasdaq has suspended trading in securities of a number of Russian-affiliated companies. Among these securities are shares of Yandex, Ozon and MTS.

Yandex placed $1.25 billion in bonds with a 0.75% coupon in February 2020. The coupon on bonds maturing in March 2025 is set at 0.75. On 3 March, the company paid a coupon on bonds. Payments are scheduled every six months - 3 March 3 and 3 September.

As of 28 February, the balance of Yandex funds amounted to approximately $ 615 million, funds outside Russia - $ 370 million.

The company warns that it does not currently have sufficient resources to fully repay the bonds - especially if the company fails to allocate the resources of Russia's "daughters" to the Dutch parent company.

Yandex warns that the redemption of bonds at face value can significantly affect the financial position of liquidity in the short term and affect the company's ability to meet other obligations: "We are currently planning in case of unforeseen circumstances to determine what steps will be taken in this plan and what other sources of funding will be available to us if this right of redemption is activated," said the company.

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