VK came under management – Business – Kommersant

Investment company Prosus wrote off more than 25% of VK in favor of the Russian group itself. She, in turn, sold the paper for 24.8 billion rubles. structure, which will be engaged in a motivational program for VK management. The scheme chosen by Prosus and VK is not the most typical, but effective in terms of removing sanctions risks, experts say.

VK announced that the investment company Prosus, owned by the South African Naspers, withdrew from the shareholders of the Russian holding, where it owned 25.9%. Prosus donated its stake to VK, which sold the paper for 24.8 billion rubles. Singularity Lab LLC. The latter “will ensure the work of the new long-term management motivation program for VK.”

Singularity Lab LLC was established in June 2021; on October 24, 2022, Alexander Aivazov, VK Senior Vice President for Investment and Business Development, headed it. According to the Unified State Register of Legal Entities, 100% in the LLC belongs to Denis Zhuravlev, the CEO and owner of a number of legal entities without signs of public activity (Erkole, Miratech, RKK Digital Technologies). In VK, information from the Unified State Register of Legal Entities was called irrelevant, but they refused to disclose the names of the current beneficiaries of the LLC.

Prosus announced its intention to write off its stake in VK back in March, after the CEO of the Russian group Vladimir Kiriyenko got sanctioned USA. Also group announced on the sale of 100% shares of the Avito announcement service to Ivan Tavrin’s KCG holding. The transaction amount will be about 151 billion rubles.

“Companies exit the market, as a rule, through the sale of assets to Russian entrepreneurs, and most often at a discount, but the case of VK sets a certain precedent,” said Alexander Zhuravlev, EDB managing partner.

Such a scheme is not used very often, however, “it is working and is provided for, among other things, by Russian corporate law through the so-called redemption for oneself,” explains Ekaterina Makeeva, partner in the AB A-PRO sanctions practice. “As a rule, it is used as one of the ways to protect against third parties, in order to avoid the sale of a shareholder to the first comer. Accordingly, the company that bought out the share for itself then has the right to either sell it or reduce the authorized capital within a year. In this case, there was a realization,” the expert clarifies.

The deal to withdraw from VK removes sanctions risks from a foreign shareholder, said Boris Edidin, deputy chairman of the commission for the legal support of the digital economy of the Moscow branch of the Russian Bar Association.

The gratuitous write-off of shares is an uncharacteristic practice, but not unique either. “Probably, such a structure of the transaction is connected with corporate restrictions, the conditions under which the company was included in the capital of VK. For example, in the event of a sale of shares, even if at a minimal cost, other shareholders could also have redemption rights,” adds Boris Edidin.

Prosus wrote off its stake in VK, rather than selling it, as it did not want to receive any benefit from the company associated with the sanctioned entity, Finam analyst Leonid Delitsyn believes. He also explained the same with the fact that Prosus sold the Avito ad publishing service to the Kismet Capital Group group of the former head of MegaFon Ivan Tavrin, and not VK.

“Quite often, when foreign structures exit Russian business, the transfer of shares without appropriate payment is accompanied by additional contractual structures that allow you to later return the asset,” adds Ekaterina Orlova, head of legal practice at CM Grace Consulting. “At the same time, management acts as a very reliable holder.”

VK did not specify whether they had already received funds from the sale of LLC securities and what are the details of the “motivational program” – which of the employees, when and in what form will receive the papers.

Judging by the holding’s financial statements for the third quarter published today, the income from the Prosus package was not taken into account in it. Thus, VK’s profit in the third quarter reached 41.1 billion rubles. against a loss of 2.3 billion rubles. a year earlier. As clarified “Kommersant” in the holding, the net profit was affected by the sale of My.Games (see Kommersant of September 27), an exit from a joint venture with Sberbank (O2O Holding; owns Citydrive carsharing and food delivery services Samokat and Kitchen in the District). The Group showed a gain on revaluation (the difference between the fair and book value of an asset) of previously held interests in JVs and associates in the amount of RUB 24.1 billion.

The total adjusted (used in the process of making management decisions) net profit of the company amounted to 704 million rubles. against the same loss of 1.4 billion rubles. a year earlier. VK’s quarterly revenue under IFRS (taking into account proceeds from the sale of products, services, services and advertising) increased by 21% to RUB 24 billion. At the same time, the total adjusted revenue of VK, taking into account the revenue of My.Games, grew by 5% year-on-year, to RUB 32 billion.

The fact that VK’s quarterly revenue under IFRS is less than net profit by almost 22 billion rubles is due to a one-time effect, mostly from the sale of My.Games, said Anna Avakimyan, chief analyst at RegBlok: “This effect occurs during deconsolidation asset at a premium or asset consolidation at a discount. In the fourth quarter, this effect will be neutralized.”

Yulia Tishina, Yuri Litvinenko