Ahead of its $3 billion IPO, One97 Communications Ltd, the operator of the Paytm online payments app, is set to extend Rs 743 crore funding to two companies owned by founder Vijay Shekhar Sharma, according to a report in LiveMint. Paytm will buy Rs 491.93 crore worth of optionally convertible debentures – to mature in 10 years with annual interest of 15 percent, to be sold by VSS Holdings Pvt. Ltd, in which Sharma is a director
According to the report, the funding will be one in one or more tranches. The payments company will own 96 percent in VSS HoldCo on converting the debentures into shares that can be done at any point.
According to a note issued by One97 Communications Ltd to its shareholders, as reported by the daily, VSS HoldCo will utilise the funds for its primary business activities in the country. VSS HoldCo is involved in activities related to financial intermediation.
The other loan, as proposed, is an amount of Rs 250.79 crore to VSS Investco Pvt Ltd through inter-corporate deposits or ICDs. This is likely to be done in one or more tranches.