A view shows the pick-up point of online retailer Ozon in Moscow, Russia, on March 16, 2020. REUTERS/Evgenia Novozhenina
Join now for FREE unlimited access to Reuters.com
May 27 (Reuters) Signaling growing fears of a default on some corporate debts, Russian e-commerce player Ozon (OZON.O) said it had increased its investment spending and seen its free cash flow turn negative as it sought to move away from supply chain disruptions.
Nasdaq-listed Ozon, whose shares were suspended on February 28, warned in early March of bond payment problems and has since begun discussions with an ad hoc group of holders of its unsecured convertible bonds of $750 million at 1.875%.
Late Thursday, in a quarterly earnings release, Ozon said a significant portion of bondholders were entitled to receive principal and interest on May 31 and that failure to pay by June 14 would put it in default. .
Join now for FREE unlimited access to Reuters.com
Ozon, which has not been targeted by Western sanctions, said Russian capital controls and the ever-changing regulatory environment prevent it from diverting funds from its Russian subsidiaries, creating the risk that it does not have sufficient cash when needed.
“It is important to understand that a possible technical default on the bonds does not mean the insolvency of the company,” Ozon said on Friday, adding that he expected to sign an agreement with the bondholders on the restructuring by the end of the year.
Ozon is one of a handful of Russian companies in the unique position of having the funds but not being able to pay. This reflects the dilemma facing the Russian government, which is about to be pushed into a bond default by sanctions, not a lack of cash. Read more