Walmart eyes Flipkart IPO in as early as four years

Walmart eyes Flipkart IPO in as early as four years

Walmart noted that the board may be increased to nine directors at any time, with the additional director being appointed by Walmart with the majority approval of Flipkart directors and unaffiliated with Walmart.

Walmart also mentioned no celebration would be responsible to pay a termination fee if a share issuance or invest in arrangement with Flipkart were also terminated.

Minority investors holding 60 percent of Flipkart's stocks "acting collectively, may necessitate Flipkart to effect an initial public offering" (IPO) 4 decades after the beginning of their Walmart Flipkart transaction, " the Bentonville, " Arkansas-based retailer said at a May 11 filing with an U.S. Securities and Exchange Commission. No termination fee would be payable by any party if the Share Issuance Agreement or the Share Purchase Agreement were terminated, ? it said.

Moreover, Bentonville, Arkansas-based U.S. retailer said in the filing that it has the right to appoint or change chief executive or other principal executives of the country's largest e-commerce company.

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.

India's largest e-commerce company Flipkart's recent fundraise of $1.

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Walmart will also have right to 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 US retail major will initially appoint five directors on the board of the Indian company and may appoint an additional director in future. Binny Bansal, co-founder and group CEO, continues in his role while Sachin Bansal, co-founder and executive chairman made a decision to quit the company. SoftBank holds approximately 22% in Flipkart. This suggests that minority shareholders, with a combined stake of 13.8 per cent of the overall equity of Flipkart, may be able to block some transactions.

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

In case, SoftBank decides not to sell, Walmart would be left with about 55 per cent of Flipkart.

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. SoftBank's Masayoshi Son will take a call in the next 7-10 days on whether to exit India's biggest online retailer or stay invested for some more time, they said.

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