Following months of negotiations, Japan’s SoftBank, the largest investor in Jasper Infotech-owned Snapdeal, is believed to have initiated the sale of the business to Flipkart by offering Snapdeal founders Kunal Bahl and Rohit Bansal $50 million in lieu of their stake, said sources.
Sources said Kunal Bahl and Rohit Bansal, who together own 6.5% equity in Snapdeal, are expected to receive $25 million each from sale of their shares. At the same time, SoftBank, which holds a little more than 30% stake in the business, has started the process of acquiring shares of other investors, including Kalaari Capital, Nexus Venture Partners and Bessemer Venture Partners. Kalaari Capital owns less than 8% shares in the e-commerce company; Nexus Venture Partners’ equity is about 11%.
When asked about the development in an email query, SoftBank declined to comment.
However, sources close to the development explained,“Negotiations are still on. The conversation is largely around deciding the fate of the 2,500 employees who currently work at Snapdeal.”
It is believed that the sale of the e-commerce business will involve a share swap. The swap ratio being talked about is 1:10 in favour of Flipkart. Last week, in a four-hour-long board meeting, the investors in Snapdeal failed to come up with a concrete plan. A proposal to sell Snapdeal to Flipkart is understood to have been favoured by SoftBank, but others are believed to have opposed it. At the time, it isn’t known whether Kalaari Capital and Nexus Venture Partners are opposed to the sale of Snapdeal to a rival e-retailer or unhappy about the share swap ratio.
With losses spiralling, Snapdeal, it is understood, is currently left with around `500 crore in the bank. The e-retailer is believed to be losing `50 crore every month, although these numbers could not be verified .According to the filings with the registrar of companies (RoC), Snapdeal had `1,072.2 crore as cash and bank balances as on March 31, 2016.
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