Russia’s largest search engine Yandex warned on March 3, 2022, that there are two possible scenarios that could threaten continued operations. Yandex said it could run for months if any of those scenarios were avoided.
The current data center and technical capabilities will allow it to continue operating for at least a year to a year and a half, Yandex said.
But the statement was conditional on no disruption to supply, which Yandex said could negatively impact operations.
“If the supply of hardware, software or other technology used in our business or products is suspended for an extended period of time, our operations could be materially and adversely affected over time if we are unable to obtain alternative sources.”
Yandex search engine
Yandex is the most popular search engine in Russia with a large number of users It is reported that more than 60%.
Yandex is also ranked as the 8th most popular website in the world by some measures, ahead of TikTok, Netflix, Reddit and Amazon, to demonstrate the scale and importance of Yandex.
The impact of economic sanctions on Yandex?
Yandex’s statement indicates that none of the economic sanctions have targeted Yandex or any of its subsidiaries, management, directors or substantial shareholders. This means that the sanctions currently have no direct impact on Yandex.
Still, Yandex warned that a prolonged economic downturn could negatively impact results.
“Any prolonged economic downturn in Russia due to sanctions, the depreciation of the ruble or negative consumer sentiment could materially and adversely affect our results.”
Threat of seizing control
The announcement noted that it was aware of rumors that the Russian government might take control of private companies. Yandex said the move could negatively impact its value as most of its operations and assets are located in Russia.
“…any such action would have a material adverse effect on the overall value of the Yandex Group.”
Debt threatens Yandex’s future
Yandex said its euro-denominated cash reserves, equivalent to $615 million, were valued at $370 million and were located outside Russia.
Yandex said the principal amount currently stands at $1.25 billion under the rules governing its convertible notes due 2025 if Nasdaq suspends trading of its Class A shares for more than five trading days
The statement showed that Yandex did not have sufficient resources to repay the debt. It further said that even if it were able to repay a significant portion of those notes, it would still need financing to continue operating.
Yandex says they are looking for ways to make ends meet:
“We are currently working on contingency plans to determine what steps we will take in this regard and what other sources of financing we can use if a foreclosure is triggered.”
Yandex warning
Yandex said it is currently functioning normally, but warned that it cannot provide guarantees in the event of a prolonged downturn in the economy.
Citation
Read Yandex’s statement
Yandex provides the latest information on the impact of current developments
