According to the report, the deal could see a drastic fall in the valuation of Freecharge, whose parent company Snapdeal has been under tremendous financial stress. If the deal materialises, it may value Freecharge at $50-90 million compared with the $400 million Snapdeal paid for it two years ago.
“The funding deal with SoftBank for Paytm does not have Freecharge as a rider, but if Paytm is satisfied with the due diligence, it will likely agree to buy Freecharge since the price has come down drastically,” said one of the sources cited in the report.
It was earlier reported that SoftBank had reached out to potential buyers including Paytm to sell the digital payments platform at a discounted rate of $150-200 million. However, buyers were not willing to pay more than $100 million, said the news report.
Many reports have been doing the rounds about a Freecharge sale, including Mobikwik eyeing a merger with it.
It was also reported that global payments platform PayPal Holdings Inc was close to acquiring a 25 per cent stake in Freecharge for around $200 million.
SoftBank has reportedly been at loggerheads with the other investors at cash-crunched Snapdeal over future plans for the e-commerce firm that has been trying to curb its financial bleeding by exiting non-core operations and cutting expenses including downsizing staff.
In March, Snapdeal appointed former Housing.com head Jason Kothari as the CEO of Freecharge and announced an investment of $20 million in the digital payments firm.