Pavel Prass Expands Influence in Russian Tech Sector

Pavel Prass, a co-owner of Yandex, is increasing his stake in VK through a $5.4 billion deal. This move, involving a consortium of Russian investors, highlights consolidation in Russia's tech industry. VK plans to issue additional shares to alleviate debt, with Prass playing a key role.

Pavel Prass, a co-owner of the Russian tech giant Yandex, is strategically expanding his influence within the tech industry by increasing his stake in its competitor, VK. This development was highlighted in a statement released by VK on Friday, revealing a significant $5.4 billion cash and shares deal completed in July 2024, which marks the end of foreign ownership in Yandex.

The acquisition of Yandex's Russian assets involved a consortium of investors including senior management of Yandex, a fund associated with oil leader Lukoil, and businessmen such as Alexander Chachava, Alexander Ryazanov, and Prass himself. Amidst this backdrop, VK, having reported a net loss over $1 billion for the year 2024, is aiming to raise up to 115 billion roubles ($1.37 billion) via an additional share issue to address its debt challenges.

The statement from VK points to consolidation trends in Russia's tech sector, with Prass already holding shares in VK. A private subscription involving 354 million shares was executed at 324.9 roubles each, with buyers identified as AM-Invest and Agana. The specifics of the stake distribution remain undisclosed, but Russian corporate filings indicate that Prass' entity holds a 19% stake in Agana. If approved in an upcoming April 30 shareholder meeting, this share issue will enable the buyers to hold 61% of VK's extended capital.

(With inputs from agencies.)