Prosus Sells Avito

On Friday night, Prosus/Naspers announced that they had sold one of their Russian businesses. Prosus sold Avito, a classifieds website, to Russian billionaire Ivan Tavrin for 151 billion Rubles - about $2.4 billion. In the overall Prosus stable, this is a relatively small deal worth about 2% of their market capitalisation.

Unfortunately for Prosus, they are forced sellers of a business that was growing at 50% a year, and was already profitable, generating $220 million of operating profit for the group last year. There is the argument that Russian assets will struggle in coming years as international sanctions start to take their toll, so at least Prosus is getting something for the business.

Closing the deal requires some pre-conditions to be met, including converting billions of Rubles into a usable currency. Management seems confident that all will go according to plan, as they expect the transaction to be completed before the end of the month. When the cheque does clear, the money will most likely be used to finance further Prosus share buybacks.