The Indian Express (Delhi Edition)
Softbank’s India losses at $1.4 bn on Ola, Snapdeal
JAPAN’S SOFTBANK Group on Wednesday said it had incurred losses of $1.4 billion (¥160.419 billion) on investments in e-commerce player Snapdeal and taxi aggregator Ola in the period to March 2017. The losses compare with a gain of $1 billion (¥114.377 billion) in 2015-2016. Softbank is also invested in Oyo Rooms.
The multinational corporation with a focus on telecommunication and e-commerce said in its annual report that expenses of $77.63 million had arisen from the resignation of Nikesh Arora from his position as director. These had been included in “Reconciliations” for the year.
The statement comes on the samedayasthetokyo-headquartered company reported a 13 per centjumpinfull-yearnetincome, to ¥1.43 trillion for the 12 months ended March 31 that topped analysts’ estimates and was driven, primarily, by cost cuts and an improved performance by its Usbased wireless business Sprint.
Softbank first came on board as an investor in Snapdeal in August 2013, when it invested about$75millioninthee-retailer. In all, the Japanese investment firmhasinfusedcloseto$800million in the company. However, with losses spiralling, Snapdeal is strapped for cash and Softbank is nowreportedlylookingtosellthe business to Flipkart.
ANI Technologies, which runs Ola, reported revenues of Rs 758.23crorein2015-16andaloss of around Rs 2,313.7 crore.
Further explaining the cause ofthelosses,softbankannounced that it recognised loss on valuation of shares of subsidiaries and associates including STARFISH I, anintermediateholdingcompany which owns preferred shares in Snapdeal, of $1billion (¥114.059 billion), in 2016-2017.
“Highly competitive e-commerce market in India has made a trend of the company’s business performance lower than initially anticipated. The situation caused a material decrease in net asset value of STARFISH I PTE as of March 31, 2017,” the company explained in a separate filing on its website. According to the filings with the registrar of companies (ROC), Snapdeal had Rs 1,072.2 crore as cash and bank balances as on March 31, 2016. In an email a Softbank spokesperson, said, “The valuation of our financial investments are frequently adjusted upwards or downwards due to accounting policies, currency fluctuations and market dynamics...” FE