Silicon Valley Bank fallout: Nazara Tech says subsidiaries given unrestricted access to Rs 64 cr deposits in SVB

SVB fallout: Digital gaming and sports platform Nazara Technologies on Wednesday said that two of its step-down subsidiaries -- Kiddopia Inc and Mediawrkz Inc – have been given unrestricted access to the entire amount of $7.75 million, which is around Rs 64 crore that was held at California-based Silicon Valley Bank (SVB), which was closed last week.

Kiddopia Inc is a subsidiary of Paper Boat Apps Private Limited, where Nazara has 51.5 per cent stake. Mediawrkz Inc is a subsidiary of Datawrkz Business Solutions Private Limited, where Nazara has 33 per cent stake.

In a press statement, Nazara said that of the total amount (Rs 64 crore), a sum of $7.25 million, which is around Rs 60 crore, has been transferred to bank accounts of the entities outside of SVB and the balance amount of $0.5 million, which is around Rs 4 crore, is with SVB.

“We would like to inform that both the companies i.e. Kiddopia Inc and Mediawrkz Inc have been given unrestricted access to the entire amount of USD 7.75mn (~INR 64 crores) that was held at SVB. From this amount, a sum of USD 7.25mn (~INR 60 crores) has been transferred to bank accounts outside of SVB and the balance amount of USD 0.5mn (~INR 4 crores) remains in SVB accounts for unrestricted operational use,” said Nazara in a statement.

On Monday, Nazara said the US administration's statements on protecting depositors for the entire amount is a "positive outcome" and gives confidence about the recovery of money.

Earlier, Nitish Mittersain, Founder and CEO of Nazara Technologies, said the two subsidiaries have working capital to meet their requirements, including payroll, and said that the company is not looking at layoffs as a result of the Silicon Valley Bank crisis.

"The statement by Yellen (Treasury Secretary Janet L. Yellen) saying all depositors will be protected for the entire amount, is a very positive outcome and makes us more confident that we will recover all of this money," Mittersain told PTI on Monday.

US administration's recovery plan

Last week after closing the operations of SVB, Federal Deposit Insurance Corporation seized its assets after clients, mostly venture-capital firms and VC-backed companies, began pulling out their deposits, creating a classic run on the bank.

The US administration on Sunday promised that customers of the failed SVB will have access to all their money.

After receiving recommendations from the boards of the FDIC and the Federal Reserve, and consulting with the president, Treasury Secretary Janet Yellen on Sunday approved actions enabling the FDIC to complete its resolution of the Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors, an official statement said.

"The depositors will have access to all their money starting Monday, that is, March 13. No losses associated with the resolution of the Silicon Valley Bank (SVB) will be borne by the taxpayer," said a joint statement issued by the Department of the Treasury, Federal Reserve, and FDIC.

The failure of Silicon Valley Bank has left many start-ups, tech companies, entrepreneurs and VC funds nervous and jittery, even in India.

On Tuesday, Union Minister of State for Electronics and IT Rajeev Chandrasekhar said that the Centre and I-T ministry will address the challenges of Indian start-ups impacted by the Silicon Valley Bank collapse with the finance ministry to help them navigate through the crisis and address the immediate liquidity crunch they are facing.

In his interactions with start-ups, the minister asked them to engage with the Indian banking system, which, he said, has been very robust and assured them of resolving teething issues they may face.

(WIth PTI inputs)