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Paytm to lend founder Vijay Shekhar Sharma's firms Rs.743-Cr

Mint  

One97 Communications Ltd, the operator of the Paytm payments app, is to extend INR 743 crore in debt to two companies owned by founder Vijay Shekhar Sharma ahead of its USD 3 billion initial share sale planned this year. Paytm will buy INR 491.93 crore worth of optionally convertible debentures to be sold by VSS Holdings Pvt. Ltd, in which Sharma is a director. The debentures will mature in 10 years and bear annual interest of 15%. The funding will be done in one or more tranches, according to the note. Paytm will own 96% in VSS HoldCo on converting the debentures into shares, which can be done at any time. VSS HoldCo will use the funds for its primary business activities. VSS Holdco is involved in activities closely related to financial intermediation, except insurance and pension funding. Paytm's other proposal is to loan INR 250.79 crore to VSS Investco Pvt. Ltd through inter-corporate deposits, or ICDs, in one or more tranches. Sharma will raise external funding or sell his shares in the company to repay the loan.