Russian London-listed internet firm VK flags issues with servicing debt

VK

15/03/2022 15:28

March 15 (Reuters) - Russian internet group VK  VKCOq.L  on
Tuesday said it may not have enough liquidity to pay its debt
holders if most of them demand their redemption rights on a $400
million bond. 
    London-listed VK is the latest Russian company with a
Western listing to flag issues with redemption of bonds after
trading in its global depositary receipts (GDRs) on the London
Stock Exchange (LSE) was halted on March 3 and a date for
trading resuming remains unknown.
    VK, one of the largest internet companies in the
Russian-speaking internet market, said a "de-listing event"
could take place if, among other things, trading of its GDRs is
suspended for 10 consecutive days, with the cut-off date falling
on Wednesday.
    In the event of de-listing, holders of its 2025 bonds worth
$400 million are entitled to require VK to redeem the debt, the
company said.
    "It is possible that the issuer will not have sufficient
liquidity to fund the payments required for the redemption if
most of the bondholders choose to exercise their redemption
right," VK said.
    The company cited uncertainty around the impact of the
restrictions under recently enacted Russian capital controls,
among other factors.    
    VK said on Tuesday it had around $190 million in cash and
cash equivalents as of March 9, including $140 million in
foreign currency, around $80 million of which was held outside
Russia.
    VK's shares plummeted in February after Russia began what it
calls a "special operation" in Ukraine following the U.S.
decision to impose sanctions on the company's chief executive,
which dramatically changed the firm's prospects.  urn:newsml:reuters.com:*:nL5N2V601G
    Russian Nasdaq-listed firms e-commerce player Ozon  OZON.O 
and VK competitor Yandex  YNDX.O  have already said that holders
of their bonds may be entitled to redeem the principal and
interest accrued.  urn:newsml:reuters.com:*:nL5N2V74PT

 (Reporting by Reuters; editing by Jonathan Oatis)