Walmart may take Flipkart public in as early as 4 years

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Walmart's additional share purchase, if made, will be at the same price at which it made the initial investment, the filing said.

Two directors are expected to be appointed by minority shareholders (which include Tiger Global, Tencent and Microsoft) and one by cofounder (Binny Bansal), who holds a 4-5% stake. Walmart said in the filing.

Last week, Walmart Inc announced acquisition of 77 per cent stake in Flipkart for about $ 16 billion (Rs 1.05 lakh crore) in the largest e-commerce deal which will give the USA retailer access to the Indian online market that is estimated to grow to $ 200 billion within a decade.

Walmart added that no party will pay any termination fee to Flipkart if it does not go ahead with a share issuance or purchase agreement with the e-commerce firm.

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.

The bargain today awaits clearance out of India's anti trust regulator and is predicted to close later this year.

Walmart or its components could question Flipkart to issue new common shares of up to 3 billion until the closing of their "transactions and before or on the very first anniversary of their final", it also said. Flipkart board will have eight directors, down from ten.

The remaining positions will be taken up by Flipkart founder Binny Bansal and two remaining directors to be appointed by certain minority shareholders. A majority of Flipkart's minority shareholders also have a right to take the company public four years after the deal is completed, at a valuation higher than what Walmart has paid in this transaction.

The minority shareholders of Flipkart will be able to exercise a conditional right of veto over "specified decisions relating to Flipkart's business and activities", the filing said but did not spell out the details.

"Shareholders agreement would expire upon the consummation of the IPO, whether initiated by the board or the minority stockholders", it added. Walmart's filing assumes significance at a time when Flipkart's key shareholder, Japanese internet and telecoms giant, Soft-Bank, is undecided about the sale of its shares.

Walmart said the number of directors may be increased to nine at any time.

Even the financial Times newspaper reported Friday, citing unnamed sources, that Japan's SoftBank team, that owns a roughly 20 per cent stake in Flipkart, has been devoting its exit because to tax obligations since it observed farther price in Flipkart.