Three months after Axis Bank announced the acquisition of Snapdeal’s payments arm Freecharge in an all-cash deal, it is yet to release the entire amount to the e-commerce platform.
The private lender is still holding back around Rs 80 crore of Snapdeal, due to pending regulatory approvals, according to Moneycontrol.
The report said that the private bank is waiting to get the pending regulatory approval from Reserve Bank of India.
“The RBI has given the matter a hearing which will happen in about a week,” said one of the persons familiar with the development adding that the amount might be paid if RBI is convinced of the issue.
However, there wasn’t a broader clarity on the reason behind the pending regulatory approval immediately.
Snapdeal and Axis both confirmed that some amount has been held back. “The holdback is customary for completion of certain items in a deal of this nature,” both Jasper and Axis spokespersons said in separate emails to the news website.
In July, Axis bank had announced the acquisition of Freecharge for about $60 million (Rs 385 crore). Though the Axis Bank Board of Directors had given green signal for the acquisition, it was then subject to regulatory approvals from the RBI and others.
Axis Bank had announced this deal through a filing with BSE.
More than two months after the deal, on October 6th, Axis announced in a regulatory filing that the bank had completed the acquisition of Freecharge for a cash consideration of Rs 373.27 crore.
On the issue of difference of about Rs 12 crore, Axis Bank said, “The difference in announced value and executed value is due to business-related adjustments, as is standard practice for such transactions.”
The bank, however, did not give an immediate clarification if the holdback amount was over and above this difference or including this.