Telegram’s ambitions for a profitable preliminary public providing (IPO) throughout the subsequent two years at the moment are in severe jeopardy following legal fees introduced in opposition to the corporate’s chief govt, Pavel Durov.
In keeping with unique paperwork seen by the Monetary Instances, the Telegram CEO presently detained in France has spent the higher a part of the final 12 months turning down presents from potential buyers who valued the Dubai-based messaging firm at over $30 billion.
Telegram’s 2023 monetary statements, which have been reviewed by the FT and haven’t been beforehand reported, reveal that the corporate generated $342 million in income final 12 months, however suffered an working lack of $108 million. After taxes, complete losses amounted to roughly $173 million.
Telegram founder and CEO Pavel Durov is beneath formal investigation in France as a part of an inquiry into organized crime actions on the messaging platform, in keeping with Paris prosecutors. The 39-year-old has not been detained however is beneath judicial supervision and required to publish a €5 million (£4.2 million; $5.6 million) bail.
Including to the corporate’s woes within the wake of Durov’s detainment, Telegram’s complicated array of conventional and digital monetary devices have borne little fruit for buyers. In keeping with the FT, the corporate has raised about $2.4 billion by way of debt financing that is because of mature in 2026. This features a $1 billion bond providing in 2021, with Abu Dhabi state funds among the many buyers, in addition to $330 million raised earlier this 12 months in a difficulty that Durov claimed was oversubscribed.
Durov has additionally personally invested no less than $64 million in Telegram bonds, in keeping with the corporate’s 2023 monetary assertion, as a part of his bigger funding geared toward fueling Telegram’s development. Nonetheless, the value of Telegram’s bonds has dropped by practically 10 proportion factors, which at the moment are buying and selling at round 87 cents on the greenback with a yield of over 16 %, down from round 96 cents previous to Durov’s arrest at a Paris airport on Aug. 24.
The crashing of Telegram’s bond worth after Durov’s arrest complicates the power of senior bondholders to transform their unsecured debt into fairness at a reduction previous to an IPO. If an inventory takes place earlier than March 2026, senior bondholders could be given a possibility to transform their debt into fairness at a reduced price.
“Would investors buy into an IPO if they are not sure if Telegram is [a] pariah? I am not sure. Bond investors would face a similar dilemma,” one bondholder was quoted within the FT, speculating that non-public fairness buyers could take this as a possibility to worth the corporate at a steep low cost. “In either case, I would not expect a quick recovery of the bonds.”
The matter is additional sophisticated by the CEO’s personal multi-billion greenback cryptocurrency fortune. Within the wake of Durov’s arrest, the value of Toncoin (TON) has tumbled greater than 20% during the last week.
As a part of the slew of paperwork revealed by the FT, a few of Telegram’s multimillion greenback monetary losses have been offset by the corporate’s digital property, which the FT mentioned complete practically $400 million. In 2024, the corporate offered TON for over $244 million in money, primarily to particular person and institutional Russian buyers.
Learn extra: Telegram’s monetary future unsure as CEO faces legal fees, TON worth reacts