Russian internet giant Yandex on Friday warned that a trading suspension on its Nasdaq-listed shares could trigger a redemption right on a convertible bond that it does not have the resources to cover.
Unprecedented Western sanctions over Moscow's invasion of Ukraine have hammered Russia's financial system and investors have dumped Russian assets from the rouble to bonds and stocks.
Yandex said that a suspension of trading of its Class A shares on Nasdaq of more than five trading days would give holders of those notes the right to require Yandex to redeem them at par plus accrued interest under the terms of its 0.75% convertible notes due in 2025.
"The current principal amount outstanding is $1.25 billion. In the event that such redemption right was triggered, we would be required to issue a notice within five calendar days informing the holders of the notes of their redemption rights," Yandex said in a statement.
"The Yandex group as a whole does not currently have sufficient resources to redeem the notes in full."
SUPPLY CONCERNS
Yandex has avoided sanctions, but like all Russian companies it has suffered reputational damage. Lithuania asked tech companies to remove the app for Yandex's ride-hailing service from their stores this week.
"None of Yandex N.V., any of our subsidiaries, any of the members of our board of directors or management or any of our principal shareholders is a target of these sanctions," Yandex said.
However, the company said the suspension of supplies and services to Russia by a number of foreign companies could adversely affect some of its operations over time.
"We believe that our current data centre capacity and other technology critical to operations will allow us to operate normally for at least the next 12 to 18 months," it said.
Companies ceasing shipments of consumer goods to Russia could also reduce its e-commerce offering, Yandex said.
The company said it is aware of speculation that the Russian government may try to take control of companies or assets in Russia in response to sanctions. Yandex competitor VK became state-controlled late last year.
"Although we are not aware of any plans in this regard, the majority of our operations and assets are located in Russia and therefore any such action would have a material adverse impact on the value of the Yandex group as a whole."
