Ukraine targets Ozon in widening attacks on Russian online retailers

Shares in Ozon fell by almost 30% on the Moscow Exchange on Monday and shares in its major shareholder, private equity firm AFK Sistema, fell over 13%. Ozon shares had risen nearly 300% since the market turmoil that followed the start of the war in Ukraine in 2022, making Ozon one of Russia's best-performing stocks until the attacks. Kyiv has been attacking Wildberries warehouses on the grounds that they are part of infrastructure underpinning Russia's war in Ukraine. The strikes are part of a wider campaign to disrupt Russia's economic infrastructure, choke off war financing and bring the realities of the conflict home to ordinary Russians as Moscow continues to pound cities and infrastructure across Ukraine. As part of the campaign, attacks on Russian oil refineries have caused fuel shortages and forced motorists in Moscow to queue for hours for petrol. Financial analysts said that unlike privately owned Wildberries, which has the backing of its partner, state-owned bank VTB, Ozon's main shareholder AFK Sistema has a large debt and is unlikely to provide substantial support for the retailer. In remarks before the latest attacks on Ozon, Russian President Vladimir Putin promised state help in the restoration of warehouses "at a new technological level" and asked the government to design a special program to help the sector. The Finance Ministry said on Monday it had prepared measures to support Wildberries and small businesses operating on its platform whose goods have been damaged in attacks. The measures included tax breaks for up to one year. Russia's central bank has also advised creditors to support businesses affected by attacks on logistics centres and warehouses. "We keep on working," said Wildberries owner Tatyana Kim, Russia's richest businesswoman, welcoming the tax breaks. Neither the ministry nor the company disclosed the value of the support package. Ozon, which grew from an online bookstore, was once a favourite among foreign investors and had its depositary receipts listed on Nasdaq until 2023. The company raised $1 billion in an initial public offering in 2020. It is now listed on the Moscow Exchange. Before the war, international investors included U.S.-based BlackRock, which said it held no Ozon shares in 2023. Ozon does not disclose the names of its investors, but Norway's sovereign wealth fund, the world's largest, reported ownership of 0.23% of shares in Ozon as well as over 1% of shares in Sistema last June. The European Union imposed sanctions on Ozon and Wildberries' financial units on July 24. Ozon said its unit does not operate outside Russia and does not have any assets, which could be hit by Western sanctions. Ozon said in a statement that a logistics hub in Makhachkala in Dagestan was on fire and had halted operations after a drone attack, adding: "According to preliminary information, several people were injured." A fire also broke out at an Ozon logistics hub in the town of Enem on the outskirts of the city of Krasnodar, and workers were evacuated from warehouses in Adygeysk, in the Adygeya region, and in Nevinnomyssk in the Stavropol region although neither facility was damaged, it said. Work at an Ozon logistics centre in the Samara region was halted on Saturday after it was hit in a drone strike, and the company said work had been halted at its logistics centre in the Orenburg region, from which over 300 people were evacuated. Ukraine has targeted four logistics hubs owned by Russia's second-largest online retailer Ozon OZON.MM, widening a campaign of drone strikes on Russian e-commerce companies intended to inflict more damage on the war-battered economy. Ozon's shares tumbled on Monday after it reported the strikes in southern Russia, which brought to six the number of its facilities targeted in the last three days. Kyiv had until last week focused on Ozon's rival, Wildberries, in attacks on the e-commerce sector — one of the fastest-growing parts of the Russian economy, which is otherwise close to stagnation after 4-1/2 years of war in Ukraine.

Ukraine targets Ozon in widening attacks on Russian online retailers

Shares slide and broader campaign expands

Wildberries, state support and Ozon background

Company says warehouses were hit in several regions

Ukraine widens drone attacks on Ozon logistics hubs

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