Prosus, a Dutch investor affiliated to South African Naspers, announced yesterday it will write off its 25.9% stake in VK Company. This stake was valued on its books at $700 million, as stated by the company.
“Over the last week, international sanctions have been imposed on many Russian entities and individuals. These include sanctions on the CEO and indirect shareholders of online platform VK Group, in which Prosus holds a minority stake. As a consequence of these sanctions, Prosus asked its directors on the VK Board to resign their positions. We expect to write down the full carrying value of the VK asset, of approximately $700 million in the current reporting period.”
Previously known as Mail.ru Group, this leading Russian Internet group owns top local social networks Vkontakte and Odnoklassniki, as well as a variety of assets in the fields of mobility, gaming, and more.
Registered in Cyprus and listed on the LSE (since 2010), the group saw trading in its London shares suspended on March 3 after tumbling 92% this year, reports Reuters.
VK Company is strongly exposed to the current international crisis due to the fact that it is largely owned by state-controlled groups Gazprom and Rostec own the company. Its recently appointed CEO, Vladimir Kiriyenko, is the son of a top Kremlin administration official.
Kiriyenko son — alongside other “elites and families close to Putin” — is featured in the US Treasury’s initial sanction list published this past Tuesday, Feb. 22, in response to Russia’s recognition of the Donetsk and Luhansk separatist republics in Ukraine. The US government has blocked “all [his] property and interests in property that are in the United States.”
Prosus is also the owner of Avito, Russia’s online classifieds leader. On a call with investors after the write off decision was announced, Prosus executives said, as quoted by Reuters, that Avito will “obviously” be impacted, but that it was “too early to say exactly” how.
According to Prosus CEO Bob Van Dijk, said had valued Avito at $6 billion before the conflict in Ukraine.
