SoftBank posts $1.4-billion lossfrom Ola, Snapdeal investments

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SoftBank posts $1.4-billion lossfrom Ola, Snapdeal investments

Earlier news agency PTI had reported that Softbank, Japenese investor in Snapdeal, was close to getting approval from its partner investor Nexus Venture Partners for Snapdeal's sale to Flipkart.

Commenting on the same, a source close to the development told Moneycontrol, "The due diligence will start next week with some Flipkart executives coming to (Snapdeal's) office and warehouses".

The impending merger of troubled e-commerce firm Snapdeal with bigger rival Flipkart could happen as early as next week, two persons familiar with the matter.

With the largest shareholder in Snapdeal, SoftBank, securing a go-ahead from one of the other investors Kalaari Capital last month, the transaction was due NVP's nod.

In its annual report for FY17, the SoftBank Group said it has recorded loss from Indian investments to the tune of Japanese yen 160,419 million ($1.4 billion).

According to a company statement, the firm recognised a loss on valuation of shares of subsidiaries and associates of JPY 114,059 million ($1 billion) in 2016.

Moving further reports also suggests that Paytm is talks with SoftBank to raise up to $1.9 billion in fresh funding that could value it between $8 billion and $9 billion. Emails sent to SoftBank, Snapdeal, Flipkart, Kalaari Capital and Nexus Venture Partners did not elicit any response till the time of going to the press.

SoftBank is the largest investor in cab-hailing app Ola and e-commerce marketplace Snapdeal.

ANI Technologies, which runs Ola, reported revenues of Rs 758.23 crore in 2015-16 and a loss of around Rs 2,313.7 crore. "Indian e-commerce companies have seen funding dry up over the last few months as investors are focusing extensively on profitability and rationalisation of expenses", they added.

Jasper InfoTech, the parent company of Snapdeal, has been pumping in money into FreeCharge, having put in about '420 crore according to documents filed with the registrar of companies. The Masayoshi Son-led Internetto- telecom conglomerate's latest write-off follows SoftBank's announcement in February of a $350 million loss on its investments in both Snapdeal and Ola.

However, the company has been disp laced by cash-rich USA giant Amazon from the second spot and is now trailing way behind the two leaders.

Earlier on Wednesday, Softbank issued a press release and said: "Highly competitive e-commerce market in India has made a trend of the company's business performance lower than initially anticipated".

The Snapdeal founders Bahl and Bansal have gone directly to employees with a string of townhall meetings, promising profit and brushing off takeover talk.

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