Paytm signs non-exclusive term sheet to acquire Snapdeal-owned FreeCharge: report

Digital payment and commerce company Paytm has signed a non-exclusive term sheet to acquire Snapdeal-owned digital payments platform FreeCharge, the Economic Times reported today. Snapdeal's loss making digital wallet arm was struggling to raise fresh capital for more than a year.

According to a report in the ET, Paytm will begin financial and commercial due diligence of FreeCharge next week. "If successful, the deal, estimated at between USD 45 million and USD 90 million, could be finalised in a month," the ET quoted an official as saying.

The report also said that the Paytm is in advanced stage of discussions to raise up to USD 1.9 billion in fresh funding from Japan's Soft-Bank that could value it between USD 8 billion and USD 9 billion. The Softbank, which is Snapdeal's largest stakeholder, is currently negotiating the sale of the company to rival firm Flipkart.

The SoftBank Group has recorded loss of USD 1.4 billion in 2016-17 from investments in Snapdeal, Ola and others. It write-off over USD 1 billion on valuation of its investment in Snapdeal.

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. This situation caused a material decrease in net asset value of Starfish I Pte as of March 31, 2017, and therefore SoftBank Group impaired the carrying amount of its shares in the company, to the amount equivalent to its net asset value."

SoftBank Group's intermediate holding firm Starfish I Pte Ltd owns preferred shares in Jasper Infotech, who runs 'Snapdeal.com,' an e-commerce site in India.