Russian tech giant returns home
VK Group, which owns a top Russian social media platform with the same name, will move its business back to Russia and quit the London Stock Exchange, the company said in a press-release on Friday.
VK announced that its shareholders and board of directors have decided to terminate its activities in the British Virgin Islands, where the company is currently registered, and re-register as an international firm in one of Russia’s “offshores.”
“Following the official registration in the Russian Federation, VK will become an international company – Public Joint Stock Company ‘VK’ with its seat in a special administrative district on Oktyabrsky Island, Kaliningrad region,” the firm stated.
The company’s board also decided to quit the London Stock Exchange (LSE) and to list VK’s shares instead on the Moscow Exchange, its first listing there. The trading of its securities on the LSE was suspended amid Ukraine-related sanctions against Russia on March 3, 2022.
VK’s Board of Directors had initially announced plans to redomicile the business in Russia back in February, saying at the time that it was only natural as the vast majority of its assets “are based in and generate revenue in Russia.”
Last year, the head of VK, Vladimir Kiriyenko, said the company was working on a new long-term business strategy which would “take into account external restrictions.” Kiriyenko was targeted by US and UK sanctions last year, which prompted Apple to remove VK’s apps from its App Store in mid-2022. However, they have since been restored.
VK Group is one of the largest firms in the Russian telecom and IT sector, owning, among others, Mail.Ru, VKontakte, and Odnoklassniki social networks, and Skillbox educational platform.
According to VK’s financial results report published on Thursday, the company’s revenue for the first six months of the year amounted to 57.3 billion rubles ($581 million), a 36% increase compared to the same period in 2022. However, the company’s pre-tax profit was down by 42% at 3.9 billion rubles. VK attributed the revenue decline to the development costs of the so-called “new business areas” related to the replacement of various digital services like Tinder and Spotify that have left Russia due to Western sanctions.
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