VK Group, the parent company of the popular Russian social media platform VKontakte, has announced that it will be redomiciling its business from the British Virgin Islands back to Russia. In addition to this move, VK Group will also be quitting the London Stock Exchange and listing its shares on the Moscow Exchange for the first time.
The decision to redomicile VK Group’s business back to Russia was made by its shareholders and board of directors. The company plans to terminate its activities in the British Virgin Islands and re-register as an international firm in one of Russia’s “offshore” regions. After completing this process, VK Group will become an international company known as Public Joint Stock Company ‘VK’, with its seat in a special administrative district on Oktyabrsky Island in the Kaliningrad region.
The relocation of VK Group’s business to Russia is seen as a strategic move that aligns with the majority of the company’s assets and revenue being generated in Russia. VK Group’s Board of Directors had previously announced its plans to redomicile the business back in February, highlighting the importance of having operations based in the country where the company operates.
In addition to redomiciling its business, VK Group has also decided to quit the London Stock Exchange and list its shares on the Moscow Exchange. This move comes after the trading of VK’s securities on the LSE was suspended due to Ukraine-related sanctions against Russia. By listing on the Moscow Exchange, VK Group aims to ensure continued access to capital markets and establish a stronger presence in its home country.
VK Group is one of the largest firms in the Russian telecom and IT sector, known for owning several popular platforms including Mail.Ru, VKontakte, and Odnoklassniki social networks, as well as the Skillbox educational platform. The company’s financial results report for the first six months of the year showed a 36% increase in revenue compared to the same period in the previous year. However, VK Group’s pre-tax profit was down by 42%, which the company attributed to development costs in new business areas aimed at replacing digital services that have left Russia due to Western sanctions.
The decision to redomicile VK Group’s business and list its shares on the Moscow Exchange reflects the company’s efforts to adapt to external restrictions imposed by international sanctions. By regaining control over its operations and aligning them with its core market in Russia, VK Group aims to strengthen its position in the industry and ensure long-term growth and sustainability.
Overall, VK Group’s redomiciliation and listing on the Moscow Exchange represent significant strategic moves for the company. By bringing its business back to Russia, VK Group aims to consolidate its presence in its key market and overcome the challenges posed by international sanctions.