Walmart likely to pump in additional United States dollars 3 billion in Flipkart


The investors could demand that Flipkart's valuation through an initial public offering be no less than the roughly $20.8 billion the company commanded when Walmart purchased a 77 percent stake.

Even it would appoint or replace Flipkart's chief executive and other key executives of group companies after consulting Bansal and the board.

The IPO ought to be done no more a appraisal than that at which wal mart spent from the Indian ecommerce firm, " the filing explained.

Minority shareholders after the deal include co-founder Binny Bansal, China's Tencent Holdings ( 0700.HK ), U.S. hedge fund Tiger Global Management and Microsoft Corp ( MSFT.O ).

At any time after the closing of the transactions and on or before the first anniversary of the closing, the purchaser, or any of its affiliates, may request that Flipkart issue additional ordinary shares with an aggregate purchase price of up to United States dollars 3 billion, it said. According to the filing, the Flipkart board will initially have eight directors, five of which would be appointed by Walmart. (WMT.N) said on Saturday in a filing with a USA regulator that it may take India's Flipkart public in as early as four years, detailing for the first time a potential listing timeline for Walmart's largest-ever acquisition.

So far, Walmart has not revealed the price at which it bought Flipkart stake, and different tranches may have been purchased at different prices.

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In a filing with the Securities and Exchange Commission of the U.S., the $500-billion Bentonville, Arkansas-based retailing giant lifted the veil of secrecy ever so slightly on the deal that it has negotiated with the Sachin and Binny Bansal, the unrelated co-founders of Flipkart, and other existing shareholders of the Bangalore-headquartered group that comprises five companies based in India and four in Singapore.

"The share issuance agreement and the share purchase agreement also contain customary termination rights for the parties including, among others, by the Purchaser (Walmart) if the transactions have not closed by March 9, 2019".

Walmart or its units could ask Flipkart to issue new ordinary shares of up to $3 billion before the close of the "transactions and on or before the first anniversary of the closing", it said. No termination fee would be payable by any party if the Share Issuance Agreement or the Share Purchase Agreement were terminated, it said. The USD 500 billion retail titan has disclosed in a US SEC filing that it might take Flipkart public in as early as four years.

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

Among other transfer restrictions and subject to certain exceptions, transfers of Flipkart shares will be subject to a right of first refusal exercisable by Walmart and other significant Minority Shareholders, and in certain situations, co-sale rights. The right to buy additional stake is important as Softbank, one of Flipkart's largest shareholders with a 20% stake, has still not made a final decision to sell its holding because of tax reasons.