Prosus expects R11.8-billion writedown as it quits Russia’s VK Group

Naspers’s European-listed spinoff Prosus expects to write off US$769-million (R11.8-billion) and asked its directors on the board of social media platform VK to resign following sanctions against the Russian firm’s CEO.

The Dutch e-commerce giant owns a 27% stake in VK (until recently known as Mail.ru), one of myriad Internet-related assets around the world. Its main other Russian interest is Avito, a classified ads site. Prosus will continue to own and run Avito, CEO Bob van Dijk told investors late on Monday, and will support the firm’s Russian staff.

VK CEO Vladimir Kiriyenko was among individuals sanctioned by the US treasury in the wake of Russia’s invasion of Ukraine. He is the son of Sergei Kiriyenko, the first deputy chief of staff of the office of President Vladimir Putin. Avito isn’t the subject of sanctions, Van Dijk said.

Prosus’s update comes as other international firms move to distance themselves from Russia, which has been hit by a wave of sanctions related to the Ukraine war. Oil majors Exxon Mobile, BP and Shell have initiated plans to sever connections with Russian partners, and Apple and Nike both said they would halt product sales in the country.

In Ukraine, Prosus is helping employees relocate, either across borders or into the west of the country. The war should have a manageable impact of Prosus’s finances, Van Dijk said.  — (c) 2022 Bloomberg LP