By Alexander Marrow
(Reuters) -Russian internet company VK plans to raise up to 115 billion roubles ($1.36 billion) through an additional share issue to reduce its debt burden, it said on Thursday as it reported a net loss that almost tripled in 2024.
State-controlled VK is one of Russia’s key domestic internet platforms, named by President Vladimir Putin as a potential foil to Western competitors, particularly in terms of video hosting, although VK has struggled to eat into YouTube’s market share.
“VK plans to raise up to 115 billion roubles,” the company said in a statement. “The company will direct the received funds to lowering its debt burden.”
As of December 31, 2024, VK’s debt/equity ratio was 6.44.
“The company expects to reduce its debt burden and does not plan to upscale it, intending to implement major investment projects in the format of partnerships,” VK said.
VK’s Moscow-listed shares fell 6.8% on Thursday to 305.7 roubles per share by 1054 GMT. Before Moscow invaded Ukraine in February 2022, it had traded at around 1,000 roubles per share.
VK said its additional share issue would be priced at 324.9 roubles each, based on its average share price for three months up to March 18.
VK’s net loss in 2024 rose to 94.9 billion roubles, up from 34.3 billion roubles the year before, the company said.
VK said expenses for attracting content creators and producing content, technical equipment and development, as well as staff, had all increased as it seeks to boost its audience.
Full-year revenue grew 23% year on year to 147.6 billion roubles, VK said, largely thanks to a 20% increase in online advertising revenue.
VK services, including Russia’s most popular social network VKontakte, its video platform and other online tools, is used by 77 million people each day.
($1 = 84.3000 roubles)
(Reporting by Alexander MarrowEditing by Tomasz Janowski and Elaine Hardcastle)
