Telegram’s financial woes continue as CEO faces criminal charges, TON price reacts

Telegram’s ambitions to hold a lucrative initial public offering (IPO) within the next two years are in serious jeopardy following criminal charges against the company’s CEO Pavel Durov.

The Telegram CEO, currently detained in France, spent much of the past year rejecting offers from potential investors who valued the Dubai-based messaging company at more than $30 billion, according to private documents viewed by the Financial Times.

Telegram’s 2023 financial statements, reviewed by the FT and not previously reported, show the company made $342 million in revenue last year but suffered an operating loss of $108 million. After taxes, total losses came to about $173 million.

Telegram founder and CEO Pavel Durov is under formal investigation in France as part of a probe into organised crime activities on the messaging platform, according to Paris prosecutors. The 39-year-old was not detained but remains under judicial supervision and must post €5m (£4.2m; $5.6m) bail.

Adding to the company’s woes following Durov’s arrest, Telegram’s sophisticated traditional and digital financial tools have not borne much fruit for investors. According to the FT, the company has raised about $2.4 billion through debt financing due in 2026, including a $1 billion bond offering in 2021 that included Abu Dhabi state funds among its investors, and $330 million raised earlier this year in an issue that Durov claims was oversubscribed.

Durov also personally invested at least $64 million in Telegram bonds as part of a larger investment aimed at supporting Telegram’s growth, according to the company’s 2023 financial statement. But the price of Telegram bonds has fallen by about 10 percent and is currently trading at about 87 cents on the dollar, with a yield of more than 16 percent, down from about 96 cents before Durov was arrested at a Paris airport on August 24.

The collapse in Telegram’s bond price following Durov’s arrest complicates senior bondholders’ ability to convert their unsecured debt into equity at a discount ahead of an IPO. If a listing occurs before March 2026, senior bondholders would be given the opportunity to convert their debt into equity at a discount.

“Would investors participate in an IPO if they were unsure whether Telegram was going public?” [a] pariah? I’m not sure. Bond investors will face a similar dilemma,” one bondholder was quoted in the FT as saying, speculating that private equity investors could see this as an opportunity to value the company at a big discount. “Either way, I wouldn’t expect bonds to recover quickly.”

The CEO’s own multi-billion dollar cryptocurrency fortune further complicates matters. Following Durov’s arrest, the price of Toncoin (TON) has fallen by more than 20% in the past week.

As part of a series of documents uncovered by the FT, some of Telegram’s multimillion-dollar financial losses were offset by the company’s digital assets, which the FT said totaled around $400 million. The company sold TON in 2024 for over $244 million in cash, mostly to individual and institutional Russian investors.

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