Walmart may take Flipkart public in as early as 4 years

Eileen GuzmanMay 14, 2018

Walmart introduced earlier this week that it'll cover £ 16 billion to get a roughly 7 7 per cent stake in Flipkart in what is the US retail giant's largest-ever deal as well as a move to take on arch rival Amazon at a central growth marketplace. Walmart said in the filing that it may appoint or replace the chief executive officer and other principal executives of the Flipkart group of companies, subject to certain consultation rights of the board and the founder.

The filing said that the IPO must not be done below the value which Walmart invested in the Indian e-commerce firm.

Minority investors following the sale include Co Founder Binny Bansal, China's Ten-cent Holdings, U.S. Hedge-fund Tiger World Wide Management along with Micro Soft.

There are several situations under which the agreement can be terminated: the failure to win regulatory approval from the Competition Commission of India; material adverse change in Flipkart's business; inaccuracy of representations and warranties, and performance of covenants; and governmental or shareholder litigation challenging either of the share issuance or secondary share purchase transactions.

As part of the deal, Walmart will initially appoint five directors to Flipkart's board, two directors will be named by minority shareholders while Bansal will take one board seat, according to the filing.

Upon the terms and subject to the conditions set forth in the Share Purchase Agreement, contemporaneously with the closing of the Share Issuance, Walmart will purchase from the Sellers Preference Shares and Ordinary Shares of Flipkart for an aggregate purchase price of approximately $14 billion in cash (the "Secondary Share Purchase", and together with the Share Issuance, the "Transactions").

Walmart also said no party would be liable to pay a termination fee if a share issuance or purchase agreement with Flipkart were terminated. Binny Bansal, co-founder and group CEO, too continues in his role even as Sachin Bansal, co-founder and executive chairman made a decision to quit the board and the company.

On May 9 - the day the mega deal was announced - Walmart had said it supports Flipkart's ambition to transition into a publicly-listed entity in future.

If Walmart proposes to transfer a sufficient number of Flipkart shares such that, following the transfer, it would no longer control a majority of the Flipkart shares or appoint a majority of the Flipkart directors, each Minority Shareholder would also be entitled to transfer all of its Flipkart shares to the proposed buyer or buyers of Walmart's Flipkart shares. But two of the directors appointed by the United States retailer would not be affiliated with Walmart for the next two years. The right of first refusal for the Minority Shareholders will expire if Walmart owns 85% of the outstanding shares of Flipkart.

Last week, all significant shareholders in Flipkart like Naspers, venture fund Accel Partners and eBay had confirmed they were selling their shares to Walmart.

"Shareholders agreement would expire upon the consummation of the IPO, whether initiated by the board or the minority stockholders", it added.

But Japan's SoftBank has not yet chose to sell its 20-22 per cent stake in Flipkart to Walmart, sources with direct knowledge of the development said.

Related Articles:



« Previous article
Next article »


Popular Pages

Ryan Coogler Wants to Make an All-Female 'Black Panther' Spin-off
Especially women of color. "It's just very nice to be part of what has been a very important film to a lot of people". Killmonger would've easily washed Wakanda if wasn't for the handsome , Black, and powerful #WomenofWakanda.

United States space agency NASA plans to send first mini-helicopter to Mars
The helicopter is supposed to be used to achieve points on the surface of Mars , where you will not be able to get the Rover . The Mars helicopter will not be manned, but it will operate autonomously, in a way similar to a flying drone here on Earth .

Iran anger at Israeli strikes on Syria
For the new authorities in Tehran, Israel becomes an "occupier" of Jerusalem and responsible for the "genocide" of Palestinians. Israel's PM Benjamin Netanyahu is known to be a huge critic of Iran and supports Donald Trump in pulling out of the Iran deal.

WASHINGTON | The Latest: White House launches new AI effort
Holdren noted that his former job leading the almost 40-year-old Office of Science and Technology Policy remains unfilled. The Trump administration's commitment to science and technology education, he said, is part of its plan to adapt.

Fernando Alonso and McLaren F1 happy with qualifying results in Barcelona
Montmelo: Fernando Alonso appeared to cast doubt over his future in Formula I, calling it "demanding" and insisting the current direction of the sport is "sad".

UFC 224 Results: Amanda Nunes, Kelvin Gastelum Claim Victories
While both have slowed down hugely and lost their chins, you have to fancy Belfort who still retains that famous knockout power. Nunes likes to come forward and strike and Pennington is known for utilizing her wrestling to grind out victories.

How to Watch Golden Knights vs. Jets
The Golden Knights closed the gap back to two when William Karlsson netted his fifth goal of the playoffs, also on the power play. Right winger Blake Wheeler is second on the squad in points with three goals and 12 assists in the postseason.

Narrow IPL win for Royals
Rajasthan Royals medium pacer Jaydev Unadkat conceded that except Buttler the rest of the batsmen were not up to the task. The spinners have been well supported by the pace department led by fit-again Bhuvneshwar Kumar and young Siddarth Kaul.

Donald Trump pledges to help rescue Chinese telecoms giant ZTE
ZTE's troubles with the USA government are also playing out amid broader fears of an ascendant Chinese tech industry. ZTE paid over $100 million each to Qualcomm Inc, Broadcom Inc, Intel Corp and Texas Instruments, the official said.

Pakistan bars U.S. diplomat from leaving country
However, according to the correspondent, the FIA team is awaiting orders from the top authorities to released the U.S. official. The court during the hearing also remarked that the USA diplomat did not have absolute immunity in the country.