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Ant Group denies considering selling Paytm stake
The Alibaba-backed firm hasn’t launched a formal sale process and financial details of the potential deal have yet to be finalized, Reuters added, citing people with direct knowledge of the matter.
The companies, however, denied the report. “There has been no discussion with any of our major shareholders ever, nor any plans, about selling their stake or becoming the controlling shareholder,” a Paytm spokesperson said in a statement.
Meanwhile, Ant called the report “untrue,” saying it was based on “false information.”
Sources say that the growing conflict between India and China is the main reason why Ant is considering the sale of its Paytm stake. Relations began souring in June, after a clash between troops at the border between the two countries resulted in the death of 20 Indian soldiers.
Since then, India has blacklisted several Chinese apps and tightened the rules for investment from Tencent, Alibaba, ByteDance, and other Chinese firms.
According to one of the sources, Ant’s senior leaders recently discussed divesting its shares in Paytm. “There is a growing realization within Ant management that it would not be able to raise its stake in the company,” the person said.
Paytm was valued at about US$16 billion at its last fundraising round in 2019. This would make Ant’s stake in the Indian firm worth about US$4.8 billion.
The Reuters report also said that Ant was in the midst of an investment review, and it could postpone a divestment if it doesn’t reach the target valuation. Ant could still end up keeping a small stake in Paytm after the review, two sources added.
Ant’s potential exit from Paytm would mark another setback for the Chinese company. In November, it was forced to halt its US$37 billion dual listing on the Hong Kong and Shanghai exchanges. Ant’s initial public offering was widely anticipated to be the world’s largest trade debut.
In October, it was reported that Ant has been cutting funding and staff support to many of the overseas e-wallet firms in its investment portfolio as it pivots away from earlier ambitions of becoming a global payments leader. TechinAsia
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