Taiwanese electronic firm Foxconn writes down 80% of its US$200M investment in Snapdeal
The development comes even as Snapdeal, which walked out of a merger deal with Flipkart, is looking to pivot to a new model
Even as Snapdeal is getting ready with its new plans to pivot to a new model after its merger with Flipkart fell through, its investor FIH Mobile, a subsidiary of Taiwanese electronics major Foxconn, has written down 80 per cent of its US$200 million investment in the beleaguered e-commerce marketplace, said a report in The Economic Times, citing regulatory filings.
FIH said in the filing that it has recognised an impairment loss of US$160 million related to its investment in Snapdeal, run by Noida-based Jasper Infotech Private Limited (JIP).
In May, FIH Mobile identified an impairment indicator from a recent proposed acquisition of JIP in the market, from which the estimated value of JIP is significantly below its carrying value, it said referring to Snapdeal’s proposed merger with Flipkart which eventually collapsed.
FIH Mobile, which manufactures all non-Apple handsets for Foxconn, had invested about US$200 million in Snapdeal in return for a 4.07 per cent stake. The investment was done when Snapdeal was a key player in the Indian market, but it gradually lost significant marketshare to Flipkart and Amazon.
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