Naspers to sell Russia’s biggest online classifieds business Avito

South Africa’s Naspers internet group is selling Russia’s biggest online classifieds business which Ukrainian government officials allege hosted ads for Russian military recruitment and goods looted from Ukraine.

Prosus, Naspers’ Dutch-listed investment arm, said on Friday that it was seeking an “appropriate buyer” for Avito, Russia’s answer to Craigslist, which was valued by analysts at $6bn before Moscow’s invasion of Ukraine.

Earlier this month, Ukraine’s digital transformation minister criticised Naspers, which is also Tencent’s biggest shareholder, for continuing to own Avito, citing evidence that it had hosted adverts placed by the Russian defence ministry for contract soldiers.

“In addition, trade in the stolen items of Ukrainians during the Russian invasion is a massive thing on Avito,” said Mykhailo Fedorov, who is also one of Ukraine’s vice-prime ministers.

Oleksii Makeiev, Ukraine’s special envoy on sanctions, wrote to Naspers chair Koos Bekker and chief executive Bob van Dijk this month urging them to sell Avito. A Ukrainian social media campaign also targeted this month’s UK Chelsea Flower Show, which is sponsored by The Newt, Bekker’s Somerset estate, over the site.

Prosus said in March that it took action over “a small number of job adverts for military vacancies” that were posted on Avito, which hosts about 90mn ads at any one time. A week later, the company said it was separating Avito from its wider OLX classifieds business, which also operates in Ukraine.

“Following completion of the operational separation, and given the ongoing war in Ukraine and unpredictable environment, we have concluded that continued ownership of Avito is no longer tenable,” Prosus said on Friday. “We have started the search for an appropriate buyer for our shares in Avito.”

Naspers said, in response to the Ukrainian claims: “To our knowledge, the Avito site hosts no advertisements for mercenaries or frontline military positions,” adding that Avito forbade listings that included weapons or illegal content.

It said that in March an account had been hacked “with an IP address outside of Russia and a frontline military job ad was then posted”, which was removed.

Naspers is Africa’s biggest listed company because of the 29 per cent stake in Tencent held by Prosus, but before the war Avito was one of the group’s fastest-growing companies, recording more than $300mn in revenue in the six months to the end of September 2021 when Prosus valued all of its classified businesses at $14bn. 

Dividends from Avito were also a large source of cash flow for Prosus, alongside cash from Tencent. Prosus said in March that it could retain an investment-grade credit rating even if the Avito dividends were cut off.

In March, Prosus also wrote down the $700mn value of its 27 per cent stake in Russia’s VK social media platform and withdrew its board of directors after Vladimir Kirienko, the site’s chief executive, came under US sanctions.

Prosus has pledged $10mn in humanitarian aid for Ukraine.