FT: Western sanctions freeze $500 million in Telegram bonds in Russia

Telegram cannot redeem Russian bonds worth $500 million due to Western sanctions against Russia. The securities have been blocked in the National Settlement Depository of Russia. About this reports Financial Times.

Messenger issued $1.7 billion in new bonds in May to buy back existing debt. The company has repaid most of its debt maturing in 2026, but $500 million remains frozen in a Russian depository.

Following the start of a full-scale invasion of Ukraine in 2022, the EU, US and UK imposed asset freezes and other restrictions on Russia’s NSD. These sanctions could hit any Western entity with Russian bondholders.

The situation is especially unpleasant for the founder of Telegram Pavel Durov, who has been trying to distance himself from Russia in recent years. Durov has repeatedly criticized assumptions about his ties to the Kremlin, calling them conspiracy theories.

Telegram has notified bondholders that it will repay the frozen debt when it matures. The paying agent and depositary must then decide whether the funds can flow to Russian investors.

Despite having a small staff of less than 100 employees, Telegram is growing its revenue. In the first half of 2024, the company earned $870 million, a 65% increase over the same period last year.

Almost a third of the revenue, or $300 million, came from exclusivity deals. According to the FT, these deals are related to toncoin, a cryptocurrency that is tightly integrated into the messenger.

• This happened against the backdrop of Telegram's preparations for a possible IPO (transfer of the company to state ownership), which is currently on hold due to criminal proceedings against Pavel Durov in France.
• On November 13, it became known that French investigators completely lifted restrictions on movement Telegram CEO Pavel Durov.