Telegram is going to raise $1.5 billion in bonds, despite the legal problems of CEO Pavel Durov, The Wall Street Journal reports, writes UNN.
Details
"When the messaging app Telegram offered a bond sale in the US earlier this month, its CEO was stuck in France, where he faced criminal charges. That didn't stop the company from attracting investors. According to people familiar with the situation, Telegram is going to raise at least $1.5 billion in bonds on Wednesday, receiving support from both new and existing sponsors," the publication said.
The deal, as noted, is a sign that investors are still willing to support Telegram, despite the legal danger faced by Pavel Durov, who has been preliminarily charged in France with refusing to cooperate with investigations of illegal activities such as child pornography in his application. Durov and Telegram dispute French officials' claim that the company refused to cooperate with criminal investigations.
According to people, Telegram intends to set the price of five-year bonds at 9%. The company plans to use the proceeds to redeem the remaining debt on bonds issued in 2021, which are due to mature in March next year. Previously, the company bought back about $400 million of these bonds in cash.
Investors include existing Telegram bondholders, including US asset management company BlackRock and Abu Dhabi state investment company Mubadala, sources said. The new investors are expected to include hedge fund firm Citadel and others, sources said.
As with Telegram's previous bond issue, investors in the new bonds will have the opportunity to convert their debt into shares at a discount if the company decides to go public. However, an initial public offering in the near future is unlikely, given Durov's legal uncertainty and market volatility, the publication notes.
Although Durov was released on bail, he is prohibited from leaving France without permission while the investigation continues.
On May 12, Durov requested special permission to visit the United States to negotiate with investors, but the request was denied because the reason for the trip was "neither convincing nor justified," French prosecutors said.
Previously, French officials allowed Durov to travel in March and April to Dubai, where he lives and where Telegram is based. In 2021, France and the United Arab Emirates granted citizenship to Durov, who was born in russia.
Addition
Against the backdrop of legal danger, Telegram continued to grow. In March, Durov said the app had reached 1 billion monthly active users. On Tuesday, he said the app has more than 15 million paid subscribers, double the number last year.
Telegram told investors that in 2024 it made a profit of about $540 million on revenue of $1.4 billion, according to people familiar with the matter. This is more than a loss of $173 million on revenue of $342 million in 2023, according to financial statements reviewed by The Wall Street Journal.
In 2025, Telegram forecasts a profit of more than $700 million on revenue of $2 billion, people familiar with the matter said.
Telegram's financial performance is supported by partnerships with developers who create applications and bots on top of the company's services, purchases of digital "stars" in the application for sending gifts and purchasing services, in addition to its advertising business.