Prosus has unveiled plans to sell its Russian classifieds business Avito, following a decision to separate from the unit at the start of the Russia-Ukraine war earlier this year..
In March, Prosus’s classified unit OLX Group began an operational separation with Avito. At the time, company said it had decided “to cease all involvement in its Russian operations.”
“The separation process is under way which will decouple the companies into two independent entities. Avito will operate as an independent Russian entity run by a local management team, and governed by its own board of directors,” Prosus said at the time.
With that process now complete the Naspers subsidiary said it had decided to completely exit the Russian business. “We have started the search for an appropriate buyer for our shares in Avito,” the group said on Friday.
The group has 4,000 employees in Russia through Avito. Prosus parent company Naspers bought out Avito’s minority shareholders in a 2019 deal worth about $1.1bn (R17.4bn). The unit is now thought to be worth $6bn.
Prosus’s decision to abandon the Russian unit comes on the heels of public pressure from groups in Ukraine. An organisation called the Ukrainian PR Army recently launched a scathing attack on the apparent failure by Prosus to terminate or even suspend its links with the Russian classified ads website.
Earlier this year, the international e-commerce arm of Naspers wrote down its $769m stake in Russian social networking platform VK Group and vacated its board seats.
Prosus, worth R1.6-trillion, holds a minority 27% stake in VK — previously known as Mail.ru — which is worth about $165m. Its platform known as VKontakte is touted as Russia’s answer to Facebook.
VK is listed on the London Stock Exchange but is controlled and run in Russia. The writedown comes after VK Group CEO Vladimir Kirienko was added to a US sanctions list after the Russian invasion of Ukraine.
Despite all the developments in Russia for Naspers and Prosus, those businesses make up a small piece of the group’s pie. Investors, at least for now, appear to still be more concerned about prospects in China — the largest piece of Prosus’s portfolio through Tencent.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.