Last Updated on 08/06/2021 by Sanskriti
The founder of Paytm Vijay Shekhar Sharma is slated to give an extended amount of Rs 743 crore as funding to its two companies by Paytm’s operator One97 Communication. And it is ahead of its $3 Billion IPO this year. According to a note given to Paytm shareholders, the proposal, along with others, would be put to a vote at the company’s annual meeting on June 30. After Paytm’s board meeting on May 28, communication to shareholders was addressed.
Paytm would acquire Rs 491.93 crore worth of optionally convertible debentures from VSS Holdings Pvt. Ltd. The 10-year debentures have a 15% annual interest rate and will mature after ten years, of which Sharma is a director, in one or two tranches, according to the proposal.
On converting the debentures into shares, Paytm will own 96% in VSS which could be done at any moment. Funds will be utilized by VSS for its primary business activities, Paytm said.
VSS Holdco is involved in operations closely connected to financial intermediation, with the exception of insurance and pension funds, according to records with the registrar of companies. Adding on to it Paytm’s other plan is to lend Rs 250.79 crore to VSS Investco Pvt. Ltd in one or more tranches via inter-corporate deposits, or ICDs.
VSS Investco would have to reimburse the money within 12 months, or before Paytm goes public, according to the notice addressed to shareholders. Sharma will return the debt by raising external funds or selling his interests in the firm, according to Paytm, and the money will be utilized for VSS Investco’s main business operations.
Both VSS Holdco and VSS Investco were founded in January 2020 and operate in comparable industries.
