Russia’s aggression in Ukraine took the world by surprise, as the war escalated – and almost three months later, no solution has yet been found.
The world effectively went to war on behalf of the Ukrainians. A number of countries have offered arms, financial and humanitarian as well as military assistance to Ukraine.
Read: Prosus to sell Russian online marketplace Avito, previously valued at 6 billion
People around the world have attacked Russia, widely condemned the invasion, imposed economic sanctions and forced companies to sever business ties with the country.
The sum of Naspers and Prosus is increasingly caught on both sides of the battle.
Within days of the start of hostilities, the group issued a statement condemning the attack.
“We are deeply concerned about the victims of the war in Ukraine. We hope that a diplomatic solution will be found as soon as possible to reduce the situation, “the group said in a statement on March 2.
At the same time, Prosus has responsibilities towards loyal employees in Russian business. After all, they did not start a war.
“We have … more than 4,000 employees in Russia working for our locally run Russian classified business, Avito. Avito is supporting all of his team through this indefinite period, “said Prasad at the start of March.
“Our OLX Europe business employs 350 people in Ukraine and their safety is very important. We are in close contact with our Ukrainian staff and we are taking all appropriate measures to support them.
“We have arranged accommodation for workers and their families who wish to relocate from the east and west of Ukraine, and would like to leave Ukraine wherever possible,” said Pross.
“Neighbors from neighboring countries are providing their own assistance to Ukraine-based workers and their families.
“We have also increased salaries and offered additional financial assistance to those in need.
In addition, OLX Europe has pledged US $ 350,000 (US $ 1,000 per OLX Ukraine employee) to the International Committee of the Red Cross, which is currently providing humanitarian assistance to the local Ukrainian community, “Pross said in a statement. Can’t predict long-term impact on operations and investment. ”
Unfortunately, the war escalated. Global opinion and economic sanctions against Russia are effectively forcing businesses to sever ties with Russia, prompting Prosus / Naspers to sell its stake in Russian online classified advertising business Avito.
Management has responded to Moneyweb’s question with a simple answer to this difficult issue.
“On March 25, 2022, we announced the separation of Avito from our OLX Group. After the end of the operational separation, and the ongoing war in Ukraine and the unpredictable environment, we have come to the conclusion that Avito’s continued ownership is no longer sustainable, “according to Naspers.
It says Avito has not been approved, and reiterates an earlier statement that the group has begun looking for a suitable buyer for its shareholding in Avito. It describes a suitable buyer as “sharing our views on running an online platform for the benefit of the customers and the communities they serve and the people they hire”.
Naspars did not confirm or deny that Avito was valued at $ 6 billion (R94.6 billion) at any one time.
Read: BarlowWorld ‘Hanker Down in Russia’ – CEO
“As for the value of Avito, we have just started the sales process and our auditors are still going through the evaluation of all our assets as part of our normal year-end process, so we can’t comment on that.”
Regarding the Russian Internet company VK Group and Fintech PayU Russia, Naspars said, “We announced in March that we plan to write off the full cost of our interest in VK and we are working to exit this shareholding.” It added that the directors of the VK board resigned from their posts in March.
Read: Prosas expects to write R11.83bn on its stake in VK Russia
“We will also withdraw from Pew Russia, our payment business in Russia,” according to the brief statement.
Avito is a big business. Prosus mentions on its website that Avito is Russia’s top ranking platform and one of the country’s top eight most visited websites.
It is the second largest online classified business in the world with 35 million unique visitors per month and growing.
“Thousands of Russian businesses use Avito to sell products to consumers, from cars and real estate to clothing and electronics. Since its inception, millions of Russians have used Avito to buy and sell anything from homes, cars and mobile phones. Every day Russia makes life easier for thousands of people, “he said.
Naspers invested in Avito in March 2013 and in 2015 became the largest shareholder in the company. After reorganizing Naspers and creating and enlisting Prosus, Avito moved to Process.
Within a few weeks everything changed. Following Russia’s invasion of Ukraine on March 21, February 24, Prosus issued another statement regarding Avito: “In Russia, our Avito classified sites host about 90 million active ads and moderate about 5 million new listings every day. We were alerted to a small number of job advertisements for military vacancies posted on Avito, and this has now been resolved. ”
Read: Prosus removes military job ads in Russian online marketplace
A statement issued on March 25 informed the shareholders that the Process had decided to be fully involved in its Russian activities. It separates Avito from the OLX entity and states that Avito will operate as an independent Russian entity, governed by a local management team and governed by its own board of directors.
“Process will not be involved in business activities on a day-to-day basis and will not invest more in Avito out of interest or seek to make an economic profit in this situation,” it said. Russian business.
The most difficult question is who will buy Avito and other Russian businesses.
It will be difficult to find a “suitable” buyer. If the investment is forced – either by the good name of the process, the business risk or the risk of strict sanctions – the same restriction will apply to any buyer.
One of the richest Russian oligarchs may have chosen Avito for the bargain, but Prosus’s list of “suitable buyers” may not include any of these wealthy politically-connected business leaders.
Perhaps the best solution would be for Pross to end the hostilities before finding a buyer and help Russian businesses maintain peace.
Shopping is often easier than selling and it is not always possible to repurchase something you have sold.
Meanwhile, Prosus announced further support of Ukrainian citizens. “The process is contributing $ 10 million to support humanitarian aid efforts in Ukraine,” it said.
“Direct donations will be made to registered and established charities to ensure that the funds reach those most in need, and our Ukrainian and Polish staff will be involved in the selection of charities. We expect to complete 10 million [around R157.6 million] The amount of the grant over the next six months, ”Pross said in a statement dated March 30.
“This contribution is in addition to the support that already exists for our employees and customers in Ukraine.”