Zomato Board To Meet On Friday To Discuss Acquisition Of Blinkit

Zomato had extended a lifeline to cash-strapped Blinkit through a loan of $150 million to Grofers India in March this year

Online food delivery platform Zomato has said that its board will meet on Friday (June 24) to discuss a potential acquisition of Blinkit. The company said this in a filing with exchanges late on June 21 (Monday).

According to a report in Moneycontrol, the board meeting may finalise the acquisition of quick commerce firm Blinkit was delayed by a week to make sure that large shareholders are convinced it’s a good deal. In its regulatory filings, Zomato also said that it may go ahead with a preferential issue of shares to finance the deal.

According to the deal discussed earlier, Zomato valued Blinkit at $700 million. However, the value of the final deal is expected to come down as it involves a stock swap of a definite number of shares in the ratio of 1:10 where Zomato would get 10 shares of Blinkit for every one of its shares.

Zomato had extended a lifeline to cash-strapped Blinkit through a loan of $150 million to Grofers India in March this year. The food delivery firm in its earnings call said that the entire amount had not been disbursed and the rest will be given out depending on whether the company needs it.

“The interest rate for the loan will be 12 per cent per annum or higher with a tenor of not more than one year. This loan will support the capital requirements of Grofers India in the near term and is in line with our stated intent to invest $400 million cash in quick commerce in India over the next two years,” the listed food tech company had said.

In August last year, Grofers India had raised $100 million from Zomato in a round that gave the company a unicorn status. That deal had gone through the process of getting approval from the competition watchdog.

One of the sources said that Zomato will acquire an Indian subsidiary of parent firm Grofers International, which is based in Singapore. The company had shifted its headquarters in 2015 to the South East Asian country which boasted of lighter taxation regulations.

Shares of Zomato were trading at Rs 66.40 on the BSE, up 0.38 per cent, during early trading hours on Wednesday.