One97 Communication Ltd , parent company of online payments app Paytm is set to extend Rs 743 crore funding to two companies owned by founder Vijay Shekhar Sharma. This development comes ahead of the $3 billion IPO planned later this year. The proposal will be put to vote at the company's annual meeting on June 30.
According
to the proposal, as sent in a note to shareholders after Paytm board meeting on
May 28, the company will buy Rs 491.93 crore of optionally convertible
debentures to be sold by VSS Holdings Pvt Ltd, where Vijay Shekhar Sharma (VSS)
is a director. The debentures will mature in 10 years and bear an annual
interest rate of 15 per cent, as mentioned in a report in Livemint.
The
note, as per the daily, stated that the funding will be one in one or more
tranches. The payments company will own 96 per cent in VSS HoldCo on converting
the debentures into shares that can be done at any point.
VSS
HoldCo will utilise the funds for its primary business activities in the
country. VSS HoldCo is involved in activities related to financial
intermediation.
The
other loan, as proposed, is an amount of Rs 250.79 crore to VSS Investco Pvt
Ltd through inter-corporate deposits or ICDs. This is likely to be done in one
or more tranches.
In
the note to shareholders, VSS Investco will have to repay the amount within 12
months or before Paytm's IPO, stated the company. Sharma will raise external
funding or sell his shares in the company to repay the loan. This amount will
also be used for principal business activities.
Paytm is one of the leading players in the payment space in
the country. Due to the increase in demand for digital transactions amid the
pandemic, Paytm's valuation rose significantly to more than $25 billion in the
last 18 months. The company is aiming to launch its IPO in November this year.
The IPO might witness partial exit of existing investors including SoftBank.
Source- Business Today
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