India Digest: Alibaba plans $100m investment in XpressBees; eInfochips sale; Bhushan Steel debt

A worker walks past a logo of Alibaba Group at its headquarters on the outskirts of Hangzhou, Zhejiang province, August 24, 2013. REUTERS/China Daily/Files

While Alibaba is looking to invest $100 million in logistics firm XpressBees, US’ Arrow Electronics is likely to acquire eInfochips. Also, Axis Bank is planning to sell its loan exposure in Bhushan Steel.

Alibaba looks to invest $100m in logistics firm XpressBees

Reports have resurfaced of Chinese e-commerce giant Alibaba Group Holdings looking to buy stake in Indian e-commerce logistics firm XpressBees.

According to a source-based report in The Economic Times, Alibaba is in advanced talks to acquire a significant minority stake in logistics company XpressBees by making an investment of up to $100 million.

As per the sources quoted in the report, the deal, which is likely to close in the next two-three weeks, will help Alibaba build a complete e-commerce network. It already has stake in e-commerce firms Paytm Mall and Bigbasket and has the payments part covered through Paytm and now logistics will be taken care of through their transaction.

The transaction, which is in the final stages of negotiations, will be Alibaba’s sixth investment in the Indian market as it builds a string of assets to take on homegrown market leader Flipkart and global rival Amazon.

It was first reported early last year that Alibaba was keen to pick up stake in logistics firms like XpressBees and Delivery.

XpressBees is the logistics business spun out of baby and maternity products retailer FirstCry, known for its acquisition of Mahindra’s Babyoye in 2016. The company competes with other online retail-focused logistics services providers like Delhivery and Ecom Express.

US’ Arrow Electronics may acquire eInfochips for over $235m

US-based Arrow Electronics is reportedly acquiring product engineering and software R&D services firm eInfochips, for over Rs 1,500 crore ($235.5 million), said a report in The Economic Times quoting sources.

As per the sources quoted in the report, the 350 employees of eInfochips are likely to get Rs 1 crore each for their ESOP holding as part of the payout.

Management of Ahmedabad and California-based eInfochips had held meeting with senior employees last week to explain the deal.

Sources from Ahmedabad-based venture fund GVFL, which holds around 5% equity stake in eInfochips, confirmed that a deal has been stuck, however said no official confirmation had been sent.

Axis Bank plans to sell $314m Bhushan Steel debt

Private-sector lender Axis Bank has decided to put its Rs 2,000-crore ($314 million) loan exposure to debt-laden Bhushan Steel up for sale in the distressed-assets market, said a report in The Economic Times quoting sources.

The move comes after Indian Overseas Bank offloaded its debt in Bhushan Steel with a 40 per cent haircut, as per the news report.

“Axis Bank does not want to stay invested in some of the large stressed assets and is looking to exit many of these large loans, as resolutions through NCLT are yet to happen,” said one of the sources cited in the report. “Market transactions indicate that the bank will manage to get 60 per cent of the loan back.”

Last week, Indian Overseas Bank had sold its Rs 620-crore debt in Bhushan Steel to SSG Capital for Rs 376 crore, taking a 40 per cent haircut.

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