"Yandex" will suspend investments in Russia and abroad due to sanctions

The IT corporation put investment on pause and withdrew its forecast for 2022 due to the consequences of the geopolitical and economic situation,sanctions and suspension of trading on the NASDAQ

The parent company of Yandex, Yandex NV, registered in the Netherlands, has suspended investments in Russia and abroad due to “geopolitical tensions” and the consequences of sanctions, follows from the company’s annual report.

“We have reduced or suspended many planned investments in our business both domestically and internationally. Any prolonged economic downturn in Russia as a result of sanctions, depreciation of the ruble, or negative consumer sentiment could have a material adverse effect on our financial position and results of operations,” the introduction of the document says.

The authors of the report noted that Yandex's business lines in Russia generally remain stable and have significant potential in the long term. At the same time, the company has faced serious problems and expects negative consequences for the advertising business due to the departure of international companies. The intention of suppliers to suspend the sale of household goods in Russia and the suspension of shipping by some companies may lead to a reduction in the selection of goods in the e-commerce service. Meanwhile, transportation services will remain stable, but they may also be affected by macroeconomic trends, Yandex suggested.

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The company also withdrew its forecast for 2022. “In the current circumstances, our visibility in the short to medium term is extremely limited. Our previous forecast for 2022 can no longer be relied upon and we are unable to provide any forward-looking comments at this stage.

Yandex recalled that trading in class A shares on NASDAQ has been suspended since February 28. Holders of the $1.25 billion convertible bonds maturing in 2025 can demand the company redeem at par, but Yandex does not have the cash to buy the bonds in full. The Holding is negotiating with a committee of bondholders to agree on a restructuring of these liabilities. There are no guarantees for the success of the discussion and their timing.

Trading on the Moscow Exchange, which resumed on March 29, is also limited due to rules on the sale of shares by foreign holders and actions in international clearing systems.

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Yandex recalled the exit from the board of directors of Esther Dyson, Ilya Strebulaev and Tigran Khudaverdyan and announced that their places would be filled in the near future. The Company evaluates contingency plans taking into account sanctions, export controls and the macroeconomic climate in Russia. The Corporation is focused on the safety and well-being of 18 thousand employees in Russia and abroad, as well as protecting the interests of shareholders.

After the release of the publication, Yandex announced that the company would continue to “invest in the development of key areas of our business in Russia, in particular, in search technologies, transport services, e-commerce, streaming services, cloud technologies, educational initiatives, etc.” “We will also continue to fulfill all commitments to our many partners and maintain all of the support programs we have announced. At the same time, some investments in new and experimental services will be suspended for a while. But in the future they may be renewed. Public companies must warn their shareholders of all possible risks, even hypothetical ones. These situations may never occur, but must be listed on the annual report to the exchange on form 20-F - this is a standard annual process.

Kommersant learned about the problems with the purchase of cars for Yandex.Drive Business

After the start of Russia's military operation in Ukraine, Yandex announced the sale of Yandex. News" and "Yandex. Zena. The company explained this decision by the desire to concentrate on the development of technological products - search, advertising, unmanned vehicles, cloud services, e-commerce, audio and video streaming, as well as a taxi service.

RBC sources said that the corporation was negotiating the sale of Novosti to VK (the former Mail.ru Group). On April 19, The Moscow Times (Roskomnadzor blocked the Russian-language website of the publication), citing two Yandex managers and a VK manager, reported that the company had postponed the sale of Zen and Novosti at the direction of the presidential administration. Yandex denied reports of a ban on the sale.

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The day before, Kommersant, citing sources in the market, wrote that the car sharing operator Yandex.Drive began to reduce the number of cars due to the expiration of leasing contracts. According to the publication, Major's lessor refuses to renew contracts or offers unfavorable conditions. A source close to Yandex.Drive said that the company is having difficulty buying new cars. This is due to leasing rates that have increased from 8 to 20%, and the suspension of quotas for car sharing services due to a shortage of cars.

A representative of the Yandex.Drive service told RBC that the forecast about the loss of the fleet "is not true." According to him, the company began to update the fleet at the beginning of the year, but the situation in the car market "has changed a lot."

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