BENGALURU & NEW DELHI: Online retailer Snapdeal, which owns a sizeable stake in logistics provider GoJavas, does not plan to sell its holding even as the promoters of the Gurgaon-based company aggressively scout for buyers.
GoJavas, which began life as an arm of fashion retailer Jabong and was spun off as an independent company in 2013, is co-owned by Snapdeal and a group of promoters including Praveen Sinha, Ashish Choudhary, Randhir Singh.
In recent weeks the logistics company has suspended operations and handed out pink slips, as the management team led by the promoters looks to sell their stakes in the company to the highest bidder. However, that strategy appears to have run into rough weather with Snapdeal indicating it will not dilute its holding in the company.
“There is no change with regard to our shareholding at Go-Javas,” said a spokesman for Snapdeal in response to a detailed query sent by ET. Delhi-based Courier Company Pigeon Express and (Delhi-based) Trackon are among those in the running to buy GoJavas, according to reports in news portal VCCircle and Mint. “There is a third entity which is in the running and the deal has not been finalised yet.
Pigeon Express has been the fastest to move,” one person close to the GoJavas management, told ET. Snapdeal’s parent company — Jasper Infotech — has invested a total of Rs 273 crore in acquiring a 42 percent stake — making it the largest shareholder in the company.
Separately, Snapdeal has also invested Rs 36 crore in building out its own logistics unit, Vulcan Express for end-to-end delivery. GoJavas has placed itself on the blocks in search of a buyer after talks with Snapdeal fell through a few weeks ago, according to two people directly aware of the issue.
The company has also failed to reconcile the payments due from its clients from November-December 2015 with “account receivables of upwards of Rs 50 crore”, said one person aware of the developments.
The bulk of these payments are due from Snapdeal and Jabong (which is now a part of Flipkart), said the source. A lack of working capital and the burden of overdue payments had stretched GoJavas’ resources. The company suspended operations citing ‘technical reasons’ since August 2.
It has also served notices to its delivery personnel to look for alternative employment by August 24, according to one of GoJavas’ clients. “They have let go of the field-force and given them a months’ notice to find alternate employment.
They will be firing the operations staff in the next tranche,” said an investor in the logistics space. Meanwhile, merchants who used the logistics service say their shipments have not been transported.
