Russia's largest internet search engine, Yandex, could collapse as the financial repercussions of the invasion of Ukraine spread to various aspects. Google's Russia is threatened with bankruptcy because of the war situation.
Yandex, which handles about 60% of internet search traffic in Russia and operates a large online transportation business, said Thursday it may not be able to pay its debts as a consequence of the unprecedented crash in financial markets triggered by Western sanctions. happened before.
The company is based in the Netherlands, but its shares are listed on the Nasdaq and the Russian stock exchange. This week's stock deals have been suspended as the value of Russian assets in Moscow and the rest of the world collapsed after the invasion. The imposition of sanctions by the United States, European Union and other major Western economies over the weekend added to this pressure.
Quoted from CNN, Yandex has not been sanctioned but can still default. Investors holding $1.25 billion in Yandex convertible notes have the right to demand full payment, plus interest, if trading on their shares is suspended on the Nasdaq for more than five days. Meanwhile, the Moscow stock market will remain closed until at least Tuesday (8/3) next week.
"The Yandex Group as a whole does not currently have sufficient resources to fully redeem Notes," the company said in a statement.
Yandex may also have to struggle with moving funds from its main operating business in Russia to save its parent company in the Netherlands due to Western sanctions and capital controls introduced by Russia this week, which aim to preserve valuable foreign currency reserves and prevent international companies from dumping their assets. .
Sberbank, Russia's biggest lender, was forced to close its European branch earlier this week after being prevented by Russia's central bank from sending money to its Vienna, Austria-based subsidiary following reports it was running out of deposits.
"If we are prevented from distributing additional funds from our subsidiary in Russia to the parent company in the Netherlands, Yandex will not have sufficient resources to redeem the majority of Notes," the technology company said. This of course can affect its ability to meet other financial obligations.
The crisis in Ukraine poses another threat to its business. Western companies stopped supplying technology and services to customers in Russia. Prolonged suspension of hardware or software sales can hurt Yandex in the long run.
"We believe that our current data center capacity, and other technologies critical to operations will allow us to continue operating on a regular track, for at least the next 12 to 18 months," Yandex said.
Yandex, which had a market value of about $17.4 billion at the start of February, reported revenue of 356 billion rubles in 2021. After the Russian currency fell, their revenue plummeted to the equivalent of approximately $3 billion.