Ozon Holdings PLC (NASDAQ and MOEX: “OZON”, thereafter referred to as “we”, “us”, “our”, “Ozon” or the “Company”), a leading Russian e-commerce platform, informs that Ozon Holdings PLC is not subject to any sanctions at the moment. Ozon also notes that there are no regulatory restrictions on the ability of U.S. persons to acquire and trade in Ozon’s securities, and non-U.S. persons are not exposed to any U.S. secondary sanctions risks in connection with such transactions.
Based on the currently available information, the Company’s management believes that there is no direct material adverse effect of the U.S., EU and other sanctions recently imposed on Russia on our current day-to-day e-commerce platform’s operations and our ability to conduct business. We primarily operate in Russia, and over 95% of GMV incl. services is generated in Russia. Over 90% of our buyers and sellers are also located in Russia. Both sellers and buyers can continue to supply and purchase goods through Ozon’s e-commerce platform as usual.
All of Ozon’s key IT systems, as well as key physical infrastructure, including fulfillment centers, sorting hubs, dark stores and first and last-mile operations are fully functional, and there have been no interruptions to either IT or logistics processes resulting from sanctions.
Transacting on our e-commerce platform continues without any disruptions resulting from sanctions. We continue to process payments of our customers and pay our sellers in the regular way. Customers are able to place prepaid orders using Mastercard, Visa, Mir, etc. on our platform. Prepaid orders account for over 90% of orders. Ozon is able to use SWIFT with a select number of partner banks.
We have a strong liquidity position with approximately 80% foreign exchange liquidity, which serves as a natural foreign exchange hedge for the Company and believe we have sufficient ruble liquidity for our current day-to-day operations. We have ensured that we have access to our cash, cash equivalents and deposits, and the majority of our deposits is now held in Russia. The Company had cash, cash equivalents and short-term bank deposits of RUB 126 billion as of December 31, 2021.
The Company notes that on February 25, 2022, Ozon filed a request to the Office of Foreign Assets Control (“OFAC”) of the U.S. Treasury Department to remove Limited Liability Company Ozon Bank (“Ozon Bank”) from the Specially Designated Nationals and Blocked Persons List (the “SDN List”) since Ozon Bank is not linked to Sovcombank. As per our recent press release “Ozon Informs about Developments at Ozon Bank”, on February 24, 2022, Ozon’s banking subsidiary, Ozon Bank, was included in the SDN List by OFAC as an entity “linked to Sovcombank Open Joint Stock Company”. Ozon acquired 100% of share capital of Oney Bank LLC (now Ozon Bank) from Sovcombank on May 26, 2021, when Oney Bank ceased to be an affiliate of the Sovcombank. Ozon can provide no assurance of the outcome and timing of the OFAC resolution on Ozon’s application.
Our business is likely, however, to be indirectly impacted by the U.S., EU and other sanctions recently imposed on Russia, particularly if they have a continued impact on the Russian economy, which could, among other things, have a material impact on activity on our platform. We may also face greater difficulties raising capital in the future, which could potentially reduce the level of future investment into infrastructure expansion and operations. We also cannot provide any assurance that any further development in sanctions, or escalation of the Ukraine situation more generally, will not have a significant impact on our business, financial condition or results of operations.
In these challenging times, we remain focused on supporting all of our stakeholders, including customers, merchants, our multiple various business partners, employees and investors to the best of our ability.
Ozon expects to release its full-year 2021 financial results on April 5, 2022, where we will also provide an update on the key year-to-date trends.
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