QIWI Announces the Sale of its SOVEST Project to Sovcombank

QIWI plc (NASDAQ: QIWI) (MOEX: QIWI) (“QIWI” or the “Company”) today announced that it has entered into binding transaction agreements to sell its SOVEST consumer lending business to Sovcombank. As a part of the transaction, the Company expects to assign claims held against SOVEST customers (the portfolio of instalment card loans) to Sovcombank with a gross carrying amount of approximately RUB 9 billion and net amount of approximately RUB 7.6 billion and to receive a cash consideration in the range of RUB 6 billion to RUB 6.5 billion for such claims. In addition, QIWI expects to transfer to Sovcombank substantially all assets including respective brands and domains. As a part of the transaction, Sovcombank intends to extend job offers to certain SOVEST employees and reimburse to QIWI a part of the redundancy costs, if any. The final value of the claims to be transferred and consideration received is subject to a valuation event to happen in approximately a month from today, which is also expected to occur on the closing date of the transaction. The transaction documentation includes representations and warranties, covenants, and closing conditions customary for a transaction of this type.

“The merger of SOVEST and Halva instalment card projects is beneficial for all parties – customers, partner merchants and the Russian banking sector as a whole. SOVEST customers will get access to Halva's 200,000 merchants and will be able to enjoy longer instalment periods. Merchant partners of SOVEST will get access to additional 5 million holders of Halva installment cards, merchant partners of Halva will benefit from adding 1 million clients of SOVEST and the Russian banking sector will benefit from increased competition” said Sergey Khotimskiy, the First deputy CEO of Sovcombank.

“The sale of the SOVEST business is part of QIWI’s strategic shift into focusing on servicing our core customer niches and developing synergetic products around our payments business. Since the inception of the SOVEST project, we were aiming to develop it through the multi-bank model, which would allow us to scale the project without taking all credit risk or funding the loan portfolio from our balance sheet.” said Boris Kim, Chief Executive Officer of QIWI. “We believe that the deal we have reached with Sovcombank is beneficial for all the stakeholders. QIWI will be able to focus on developing the product proposition for its core audience including self-employed, while our customers will continue to benefit from the convenience of the pay-by-installment card program and enjoy all the benefits of Halva card.”

Publication date: 18 June 2020