The Russian part of “Yandex” can go to the oligarchs. Whether this will benefit the leading IT company is a big question. However, it is obvious that Alexei Kudrin is pushing her towards this scenario.

The former head of the Ministry of Finance and the Accounts Chamber received a position at Yandex at the end of last year. The conditions of his arrival in the company, which was under Western sanctions, were not officially disclosed. However, it became known from the leaks that Arkady Volozh, the founder of the IT giant, who lives in Israel, offered Alexei Kudrin 5% of the company to help him divide the business into Russian and international.

Section architect

Aleksey Kudrin himself outlined his tasks at Yandex as follows: “Together with the management, I will develop the corporate structure of the new holding, which will ensure the long-term and sustainable development of the company in all markets, including international ones.” The position of the former financier in “Yandex” is called “the adviser on corporate development”. True, it is not completely clear whose interests he will represent in the company’s board. On the one hand, there is Arkady Volozh, who, in theory, needs to get as many projects out of Western sanctions as possible by transferring them to a new international company. On the other hand, there are Russian bankers and oligarchs who are not averse to taking control of the country’s leading IT company in order to multiply their incomes inside Russia. Judging by the available information, Kudrin began to play along second.

Recall that “Yandex” until now had a rather complex ownership and management structure, which was supposed to provide it with stability from hostile takeovers, as well as independence from governments of other countries. The company had two types of shares – voting and ordinary. The founders of the company and its managers retained about 12% of the capital, the rest of the shares were freely sold on the stock exchange, with more than half of the voting shares held by persons affiliated with the company, including 41.5% in the Arkady Volozh family trust. At the same time, the Russian Yandex LLC belonged to the Dutch company Yandex N.V. It was the latter legal entity that became the target for Western sanctions – now trading in its shares on the NASDAQ exchange has been suspended. The situation with bonds on the international market threatens with a default if their holders demand to immediately redeem $ 1.25 billion, to which they formally received the right.

How the company is going to steer out of the trap, in which it was through no fault of its own, is unclear. It is known that the division of business into Russian and international is considered as a working option. The problem is that it is unlikely that anyone can afford to buy the entire Russian business of Yandex at a fair price – in 2021, the capitalization of Yandex was $ 27 billion. For comparison: Gazprom’s “national treasure” by that time was worth about $100 billion. At the same time, it should be taken into account that the market for e-commerce, carsharing and taxis, on which Yandex operates, in the future can show such significant growth, which is hardly worth counting on for commodity companies.

10.8 billion rubles was the net profit of Yandex in 2022. Almost 40% of these funds were earned using the main Yandex page on the Internet and the search bar.

Cheap for their

The idea to sell “Yandex” in parts does not look good either. It is the services combined together that provide advantages over competitors, since the company has strong competitors in each business segment. What are only Wildberries, Ozone, Delivery Club and Delimobil worth. So everything is going to the fact that they will divide Yandex like an orange in a Soviet-era cartoon – not by market methods, but by concepts. Someone will get juicy slices, and someone will get an empty peel.

The other day, there were leaks about a possible scenario for the existence of Yandex in Russia. The new legal entity is supposed to be registered in a special administrative region in Kaliningrad. It will be managed by a fund of managers headed by Alexei Kudrin. The Fund will be given management of Russian business, including the right to vote with a controlling stake. What is most interesting: 51% of the capital of the Russian company is supposed to be distributed among the oligarchs. The list of possible contenders has already been published (see reference). At the same time, the price of an entrance ticket may turn out to be much lower than the level of 2021: half of the company is offered to investors for only 4 billion rubles! This was told to journalists by one of the participants in the talks.

It is noteworthy that no one even mentioned a word about the placement of Russian Yandex shares on the Moscow Exchange. But this could be a powerful step to support the Russian stock market, cut off by sanctions from the Western financial world. But why let small investors into such a tasty asset? They, you see, will also inflate share prices … So Yandex will probably be divided behind the closed door of the club of moneybags. It seems that this is Kudrin’s plan.

What can happen? In Yandex, squabbles and disputes will begin, as in any joint business of billionaires from the Forbes list. Someone will have to smooth out the sharp corners. And, apparently, Aleksey Kudrin assigns himself the role of chief arbiter. Creates a system that will not work without it. But is it good for Yandex and its users? The international Yandex under the control of Arkady Volozh, meanwhile, claims only crumbs from the former business empire – a project to create drones, cloud technologies, educational Yandex.Practicum and Yandex.Toloka data markup service.

By the way

A similar scenario, but on a smaller scale, has already taken place. In 2013-2014, taking advantage of the disagreement among the three co-founders of the VKontakte (VK) social network, Mail.Ru Group, which at that time was part of the business empire of Alisher Usmanov, gained control over it. Soon, its co-founder Pavel Durov was removed from the management of the social network. In 2014, he was forced to sell his remaining 12 percent stake. In 2021, Mail.Ru Group renamed itself VK, which confirmed the importance of the social network of the same name for its business. In December 2021, Alisher Usmanov’s USM holding ceded a controlling stake in the company to the Sogaz group (formerly a subsidiary of Gazprom, in which the gas monopolist retained a share). Also, a large stake in VK by that time was acquired by Gazprombank. In total, structures associated with Gazprom now control about 90% of MF Technologies, which, in turn, holds a controlling stake in VK. According to the report for 2022, the total net loss of VK decreased by 80.8%, to 2.934 billion rubles, while net debt increased by almost 150%, to 84.578 billion rubles.

Reference

Who can get a stake in Yandex under the supervision of Alexei Kudrin:

Chairman of the Board of Directors of NLMK Vladimir Lisin

Vyacheslav Kantor, co-owner of the mineral fertilizer manufacturer Akron

LUKOIL shareholders Vagit Alekperov and Leonid Fedun

owner of the Renova group Viktor Vekselberg

Vladimir Kogan Family Trust

Founder of Magnit Sergey Galitsky

Chairman of the Board of Directors of Kievskaya Ploshchad God Nisanov

Andrey Guryev, co-owner of the mineral fertilizer manufacturer PhosAgro

co-owner of Severstal, TUI AG, Power Machines, Nord Gold and Lenta Alexey Mordashov

co-owner of Evraz Alexander Abramov

Wildberries founder Tatyana Bakalchuk

President of Interros and MMC Norilsk Nickel Vladimir Potanin

Chairman of the Board of Novatek Leonid Mikhelson

ex-co-owner of the Pipe Metallurgical Company and Sinara Dmitry Pumpyansky

the main owner of the Magnitogorsk Iron and Steel Works (MMK) Viktor Rashnikov

Igor Kesaev, co-owner and president of the Mercury group of companies