Japan’s SoftBank writes down Rs 3,700 crore investments in Ola, Snapdeal
Japan's SoftBank Corp has announced Rs 3,700 crore write down on its investments in India including in cab-hailing firm Ola and e-commerce company Snapdeal.
Japan's SoftBank Corp has announced 58.14 billion yen (around Rs 3,700 crore) write down on its investments in India including in cab-hailing firm Ola and e-commerce company Snapdeal.
In the earning statement for six months ended September 30, SoftBank wrote off 58.14 billion yen (USD 560 million) in the value of shares in its investments in India, which include ANI Technologies, owns country's largest cab aggregator Ola, and Jasper Infotech, which runs e-commerce marketplace Snapdeal.
A write down is a reduction in the estimated value of an asset.
Of that, 29.62 billion yen was due to a currency impairment.
"Gain or loss arising from financial instruments at FVTPL (fair value through profit or loss) comprises mainly changes in fair value of preferred stock investment including embedded derivatives, such as ANI Technologies Pvt Ltd and Jasper Infotech Private Limited in India, designated as financial assets at FVTPL," SoftBank said in the earnings statement.
The Japanese firm had led a USD 210-million investment in Ola and USD 627 million in Snapdeal in October 2014. It made follow-on investments in both firms.
In May this year Softbank CEO Masayoshi Son had said that his company’s investment in India could cross USD 10 billion over the next 5-10 years from around USD 2 billion now.
Both Ola and Snapdeal are looking at raising fresh funds to sustain operations amid growing competition from rivals.
Bengaluru-based Ola has so far raised about USD 1.2 billion from a clutch of investors including Tiger Global Management, Matrix Partners, SoftBank Group and Didi Chuxing.
Last year, Snapdeal.com raised USD 500 million from Chinese e-commerce firm Alibaba Group, Foxconn Technology Group and existing investor SoftBank Group, which then valued the Delhi-based firm at about USD 4.8 billion post money.
SoftBank has so far invested close to USD 2 billion in India and earlier this year it stated that it is looking to scale up the investment to USD 10 billion in next 5-10 years.
Last month, it said it will form a new fund with Saudi Arabia's public investment fund to invest as much as USD 100 billion in the global technology industry in the next five years.
"My goal is to become the Warren Buffett of the tech industry. We're aiming to be the Berkshire Hathaway of tech," SoftBank Group Corp Chief Executive Masayoshi Son said after the earnings announcement.
For the July-September quarter, SoftBank posted a net profit of 512 billion yen, compared with 213 billion yen the year before, boosted by gains from the sale of stakes in Chinese e-commerce giant Alibaba Group Holding Ltd and Finnish game maker Supercell Oy.
(With PTI inputs)