Nasdaq decides not to delist Russian tech giant Yandex’s shares

Nasdaq decides not to delist Russian tech giant Yandex’s shares
Nasdaq has decided not to delist Russian internet giant Yandex's stocks as long as it sells off its Russia-based assets. / bne IntelliNews
By bne IntelliNews June 8, 2023

US stock exchange Nasdaq has decided not to delist the Russian tech giant Yandex NV from its New York exchange, provided the company completes plans to sell off all its Russian assets, the company announced on June 8.

On March 15, shortly after the outbreak of the war in Ukraine, Yandex received a notice from Nasdaq’s Listing Qualifications Staff informing the management that the company’s Class A ordinary shares would be delisted from the US exchange as part of the extreme sanctions imposed on Russia and its leading companies.

Yandex appealed against the decision and began the process of ditching its Russian assets, which are in the process of being sold off, but has kept some its non-Russian assets in the US listed entity.

A hearing was held before the Nasdaq Hearings Panel on April 27 to consider Yandex’s appeal.

On June 6, 2023, Yandex was told the Hearings Panel had decided to grant Yandex’s request and to continue its listing on Nasdaq, subject to certain conditions related to the timing and implementation of Yandex’s proposed corporate restructuring. Specifically, Nasdaq insisted that ownership and control of a number of core Russian businesses must be sold by the end of 2023.

Trading in the company’s shares on Nasdaq was halted on February 28 and the shares remain frozen, despite the positive decision by the exchange. The trading of Yandex NV’s Class A shares on the Moscow Exchange has been unaffected and continues as usual, the company said.

Yandex’s board of directors is in the process of restructuring the company and have received proposals from a number of potential investors to acquire the company’s core businesses, including all the Russia-based businesses.

Russia’s President Vladimir Putin greenlit the sale of the controlling stake in the internet giant Yandex to VTB Bank and billionaires Vladimir Potanin, Vagit Alekperov, Alexei Mordashov and VTB Bank on May 22.

But Yandex’s board resolved on May 25 that new shareholders will not get control over the company after the restructuring, which will continue to be run by its management.

"The new economic investors will not have control over the company. As with the current corporate structure, Yandex's management will retain control," the press service said as cited by Kommersant on May 26.

After the split of Russian internet major Yandex local investors are expected to take over 51% of the Russian entity for about $4bn (total $8bn valuation), while the minority stake of 49% will be retained by Netherlands-based Yandex NV, which is the legal entity listed in New York. About a dozen bidders of Russia's richest oligarchs submitted bids for the company, with Potanin and Alekperov previously reported in the lead.

“The company’s goal is to bring a restructuring proposal to shareholders for approval later this year. After the company enters the binding agreement with respect to the divestment, it will publish a shareholder circular and the proposed restructuring will then be subject to shareholder approval (including separate approval of Class A shareholders),” Yandex said in a statement.

Volozh's family trust (45.1%) and the company's board members, managers and employees (6.6%) were the main owners of the voting shares. However, the Volozh family trust no longer has any voting rights in the company. In 2022, the trust transferred its voting rights to the company's independent board members, according to a spokesperson for the family.

The state Public Interest Fund established in 2019 controls a "golden share" in the company. It is understood that the PIF will drop down to the Russian entity as a result of the restructuring.

Famed as the “Google of Russia” Yandex’s search and portal segment continues to earn more than half (54%) of its revenue of some $2bn last year. However, prior to Russia's military invasion of Ukraine, Yandex was looking to boost the monetisation of its technologies on the one hand and leverage them to support its international expansion on the other. Apart from e-commerce, its investment case previously rested on developments in transportation, fintech and foodtech, with the developed ecosystem seen as a key advantage. Yandex was Russia’s leading developer of AI and driverless technologies.