Prosus to write off $700 mln stake in Russia's VK Group (updated)

VK

07/03/2022 15:47

(Updates after call with CEO and CFO)
    By Toby Sterling and Promit Mukherjee
    AMSTERDAM, March 7 (Reuters) - Dutch technology investor
Prosus  PRX.AS  will write off its entire 25.9% stake in
Moscow-headquartered online platform VK Group, which it says was
valued on its books at $700 million.
    VK Group Ltd, known until October as Mail.Ru, is one of
Russia's largest internet companies, known for the VKontakte
social network, Russia's answer to Facebook  FB.O .
    The company has a depository receipt listing on the London
Stock Exchange and is registered in Cyprus, with headquarters in
Moscow.
    The writedown announced on Monday comes after the VK Group's
CEO Vladimir Kirienko was added to a U.S. sanctions list after
Russia's invasion of Ukraine. Trading in the company's London
shares were suspended on March 3 after tumbling 92% this year.
    "As a consequence of these sanctions, Prosus asked its
directors on the VK board to resign their positions," the Dutch
company said in a statement.  urn:newsml:reuters.com:*:nFWN2VA0CB
    Prosus is part of a cross-holding entity with Naspers
 NPNJn.J  of South Africa, with the two companies sharing a
single board.
    On a call with investors after the writedown decision was
made public, the company's executives said it was not yet clear
how the conflict in Ukraine will affect its Russian classified
business Avito, Russia's largest online marketplace. 
    Prosus CEO Bob Van Dijk said analysts had valued Avito at $6
billion before the conflict in Ukraine.
    "Obviously there will be an impact on the business, I think
it is too early to say exactly what it will be," he said.
    CFO Basil Sgourdos said that while VK Group's stock market
value is clear there are too many uncertainties around Avito to
value the business, especially given the falling value of the
Russian rouble.
    Avito's costs and operations are in Russia, where it employs
4,000 people.
    Prosus shares, which are down 33% this year, were up 3.9% at
49.27 euros in Amsterdam. Naspers shares, down 34% in the year
to date, closed little changed at 1,634 rand in Johannesburg.

 (Reporting by Toby Sterling and Promit Mukherjee
Editing by Edmund Blair and David Goodman)
 ((toby.sterling@thomsonreuters.com;))