Foxconn unit writes down 80% investment in India’s Snapdeal
Snapdeal's reluctance to go ahead with Flipkart merger has forced one of its major investors FIH Mobile to write down US$ 160 million
With Indian online marketplace Snapdeal staving off a takeover bid by leading player Flipkart, some of the investors have turned bearish about the company’s prospects.
The latest to do so is FIH Mobile, the Hong Kong-listed unit of Foxconn Technology Solutions. It has written down 80% of its US$ 200-million investment in Snapdeal, reports Economic Times.
During its regulatory filing for six months ended June 30, FIH Mobile said it has recognized an impairment loss of US$ 160 million for its investment in Jasper Infotech, which owns Snapdeal. FIH had bought a 4.07% stake in Jasper in 2015 and valued its holding at $200 million a year ago.
Hon Hai Precision Industry, the world’s largest contract manufacturer better known as Foxconn Technology Solutions, owns about 64% of FIH Mobile. The latter manufactures non-Apple handsets for Foxconn.
Flipkart’s acquisition move fell through as Snapdeal founders and some minority shareholders refused to ratify it. FIH, along with China’s Alibaba and Flipkart’s major investor Softbank of Japan, was in favor of the deal.
In the six-month period, FIH Mobile posted a net loss of US$ 196.6 million, compared with a net profit of US$ 21.4 million a year earlier. Revenue rose almost 90% to US$ 4.37 billion against US$ 2.31 billion in the year ago period.