Yandex warned about the risk of default due to the suspension of trading

Yandex warned investors that it could face the risk of default if the holders of its bonds, due to the suspension of trading, activate the right to demand the repayment of debt obligations. The company currently does not have enough funds for this.

We are talking about bonds maturing in 2025 for a total of $ 1.25 billion. If trading in Yandex shares on Nasdaq is suspended for more than five trading days, holders have the right to demand that the bonds be redeemed. On February 28, the NYSE and Nasdaq suspended trading in securities of Russian companies, including Yandex.

As of February 28, the company's balance of cash in dollars and euros was $615 million, of which $370 million is outside of Russia, and approximately 47 billion rubles in Russian currency. Yandex does not have enough funds to fully repay the notes. If he is not allowed to reallocate additional funds from Russian subsidiaries to the Dutch parent company, there will not be enough resources to pay off most of the bonds.

Yandex also warned that even if it manages to pay off its obligations without raising additional funding, this would have a material negative effect on the company's short-term operations, liquidity and ability to meet other obligations.

The company clarified that the capacity of its data center and other technologies critical to operation allow it to continue to operate as usual for at least the next 12 to 18 months. Over time, a business can be severely impacted if there is an extended interruption in the supply of hardware, software, or other technologies that cannot be replaced. The number and choice of products on Yandex. Market" may be significantly reduced if suppliers do not resume the sale of goods to Russia, and shipping companies - their supply.

The day before, Bloomberg reported that Yandex paid coupon income to holders of these bonds totaling $4.7 million. This is the first coupon payment in foreign currency by a Russian company after the imposition of sanctions due to a special operation in Ukraine.

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