For Yandex, the default risk is just around the corner.
But what is going on?
The NASDAQ and the New York Stock Exchange have decided to suspend all listings of Russian companies for this week. This is because before reopening negotiations, companies must clearly explain how they will be affected by the severe sanctions imposed by the United States, the European Union and their allies. Among these companies is also Yandex, the Russian Google.
Yandex and the risk of default
Yandex explained of not be subject to sanctions asking to return to the market as soon as possible. In fact, a suspension of more than five days would lead the owners of some bonds to request the redemption of their debt with interest but “the Yandex group as a whole currently does not have sufficient resources to redeem the banknotes in full. “
In finance, the technical inability of an issuer to comply with the contractual clauses provided for in the loan regulation is defined as a situation of default (insolvency in Italian).
The company could request financing that would save it from the risk of default but such a huge expense, explains Yandex, “would have a concrete negative effect on the financial position and liquidity in the short term and could affect the ability to fulfill our other obligations”
To find out what will become of the Russian search engine, launched in 1997, we just have to wait for the decision of Wall Street.