The Hong Kong-listed subsidiary of Foxconn Technology Solutions, FIH Mobile, has decided to spend 80% of its $200 Million worth investment planned for Snapdeal, the Indian online marketplace.
The firm recognized an impairment loss of $160 Million associated to its spending in Jasper Infotech. Jasper Infotech is a Gurgaon-based company. It also operates and owns Snapdeal, FIH Mobile claimed in a regulatory filing for the 6-month period that concluded on June 30, 2017. The largest contract manufacturer in the world, Hon Hai Precision Industry, which is better known as Foxconn Technology Solutions, possesses almost 64% shares of FIH Mobile.
“In May 2017, FIH Mobile recognized an impairment pointer from a new proposed acquirement of JIP in the market, from which the expected value of JIP is considerably under its carrying value,” it claimed, highlighting to ecommerce company Flipkart’s planned invasion of Snapdeal.
The expected acquirement, which was arranged by largest stakeholder of Flipkart, the Japanese company SoftBank Group, bent last month after founders of Snapdeal’ declared that they will not consent to the takeover and might carry on as an autonomous entity.
In addition to this, other minority shareholders in Snapdeal declined to sign off on the contract. FIH Mobile, in addition with Alibaba Group of China and SoftBank, on the other hand, were in favor of the business going through.
FIH Mobile headed an equity financing round worth $500 Million in Snapdeal 2 years before. This transaction esteemed the ecommerce firm at almost $5 Billion, making it, at that time, one of the most valued user Internet firms to have come out of the startup bionetwork of India.
FIH Mobile, which produces all non-Apple smartphones for Foxconn, had spent almost $200 Million in Snapdeal for a 4.07% share in the firm. “The post-impairment equity investment of $40 Million in JIPL symbolized 0.55% of the total assets of the group as of June 30, 2017,” the statement further added. The impairment got down results of FIH Mobile regulatory filing for the 6-month period that concluded on June 30, 2017. FIH Mobile gave an average loss of $196.6 Million for the same time frame.