Russian Media Mogul’s SPACs Avoid U.S. Trading Suspensions

When Russia invaded Ukraine, American stock exchanges suspended trading of most Russian stocks listed in New York. They omitted two companies founded by a Russian media mogul, which are still trading and hunting for acquisitions.

Two special purpose acquisition companies, or SPACs, founded by Russian businessman and investor Ivan Tavrin have resumed normal trading on the Nasdaq NDAQ Stock Exchange. 1.79%

even as other major Russian companies and exchange-traded funds remain suspended.

The trading suspension has affected a number of companies, including video game developer Nexters Inc., another one of Mr. Tavrin’s businesses that went public last year. Analysts tracking listings and searching US-listed companies show that Mr. Tavrin’s SPAC appears to be among the only Russian-controlled companies currently doing business in US markets.

Mr. Tavrin is not on the sanctions list. He is best known as a former business partner of Russian oligarch Alisher Usmanov, who has been subject to sanctions by the US and other countries. Usmanov, the metal tycoon, is one of Russia’s richest men and is considered an ally of Russian President Vladimir Putin.

Messrs. Tavrin and Usmanov previously co-owned television properties including Disney Channel Russia. Mr. Tavrin was also the CEO of Russian telecommunications company MegaFon PJSC – which is largely owned by Mr. Usmanov – from 2012 to 2016. Mr. Tavrin was photographed in front of the Kremlin when accepting the award from Mr. Putin in 2016. 2015 after MegaFon and other companies installed telecommunications infrastructure within the framework of the 2014 Sochi Olympics.

SPAC, known as a short check company, raised money and listed it on a stock exchange with the goal of merging with a private company to take it public. If Mr. Tavrin’s SPAC finds companies to go public and complete, he will make tens of millions of dollars on paper, depending on the share price.

“It seems inconsistent,” said New York University School of Law professor Michael Ohlrogge, who studies SPACs.

A Nasdaq spokesman declined to comment on the decision to allow Tavrin to acquire Kismet Hai Corp.

KAII -0.41%

and Kismet Acquisition Three Corp.

continue to trade while they pursue the companies to go public. Mr. Tavrin declined to comment.

The companies are named for Mr Tavrin’s family investment firm, Kismet Capital Group, which has backed his SPACs.

Subsequent Russian companies and others suspended, such as recruitment firm HeadHunter Group PLC, said they were not sanctioned. Exchanges often suspend or delist companies if they fail to meet regulations, may run into legal trouble or face other situations that could cause great damage to investors.

In the wake of Russia’s invasion of Ukraine, Mr. Tavrin’s SPAC said in its regulatory filing it is expanding its search for private companies to those with a large footprint in Europe, the Middle East and Africa and will less focused on Russia. They said negative sentiment towards Russia could prevent SPAC from making a deal.

The consequences of harsh economic sanctions against Russia have been and are being felt globally. WSJ’s Greg Ip joins other experts to explain the significance of what has happened so far and how conflict could transform the global economy. Photo illustrator: Alexander Hotz

SPACs pose little risk to investors because they trade little and hold only cash. Any deals the companies have attempted will have to be approved by regulators. Companies may also have difficulty finding banks and law firms to help them complete the merger.

“Because the SPAC structure is so complex, you don’t even know what kind of transactions it’s going to do,” said Georgetown University finance professor James Angel.

Spokespersons for Credit Suisse Group AG and Bank of America Corp., two of the banks that helped launch SPAC and previously advised Tavrin on the Nexters deal, declined to comment on whether they would do so. whether to work with Mr. Tavrin in the future or not. Citigroup spokesman too Inc.,

another SPAC underwriter.

The two SPACs have a deadline of February 2023 to seek deals or otherwise return the funds they raised to investors and lose the several million dollars they paid to set up the test facilities drum.

Nexters, the maker of “Hero Wars” and other video games based in Cyprus, has offices in Moscow but says the US, Europe and Asia account for nearly 80% of bookings and the majority of staffing. Their important work outside Russia. Tavrin owns about 6 percent of Nexters, which was worth about $75 million earlier this year, according to FactSet.

Nasdaq suspended stock trading at the end of February.

Write letter for Amrith Ramkumar at amrith.ramkumar@wsj.com

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https://www.wsj.com/articles/russian-media-moguls-spacs-avoid-u-s-trading-suspensions-11652785200?mod=rss_markets_main Russian Media Mogul’s SPACs Avoid U.S. Trading Suspensions

Edmund DeMarche

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