Renowned financial analyst Eldar Shamsutdinov commented on the sale of Choco Travel and Aviata, revealing that the situation is not as rosy as many perceive it to be.

On his Telegram channel, the expert writes:

«The sale of Choco Travel and Aviata was perceived by the general social media user as a breakthrough in the capital and technology startup market. It was the embodiment of a new Kazakh dream – from an office in a coworking space to a multi-million-dollar deal. But there are nuances.

The «Choco» holding began its journey with the country’s chief investment banker in 2016, attracting $1 million from him, in addition to three private minority shareholders in its capital.

However, there are not as many venture story enthusiasts in Kazakhstan as they claim, especially when it comes to amounts exceeding $200,000. Furthermore, some old shareholders wanted to exit «Choco.»

As a result, the country’s chief investment banker became a significant minority shareholder.

The ambitions of the «Choco» team were grand: several rounds of investment, then an IPO, and perhaps a sale to some «Russian Amazon.» Appetites grew, money was needed for «Aviata.» It was decided to raise more funds, but not in equity to avoid diluting the stake.

They turned to borrowing. A loan was obtained, and «Aviata» was bought.

Then the «Russian Amazon» came in and offered to buy the company. The Kazakh startup considered everything and said «no,» deeming the offer insufficient. After all, we have investors, a startup, and overall, «we are Silicon Valley.»

But 2020 arrived, along with the coronavirus, and European companies and «Yandex» appeared in the market. Moreover, it was time to settle debts, and shareholders began to ask questions about market share growth. What to do?

Issue bonds! After all, capital is more expensive than debt.

Enter the tough guys from Turlov, who seized «Choco» on the most favorable terms, considering the complexity of the situation.

They issued bonds at 12% per annum for 3 years in dollars, with Treasury yields at the time around 1%.

As time passed, the competition in the market did not decrease, and technologies advanced. It was time to redeem the bonds. Taking into account exchange rate differences and all the charms of life, there was not enough money. They had to sell what fed everyone, and at a lower price than the «Russian Amazon» offered.

Where did the money from the sale of «Aviata» go? Correct, to repay loans and bonds.

What’s the result? The Kazakh «BlackRock» has the largest customer base for ticket purchases, earned on dollar bonds, and remained in the capital of «Choco.»