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Walmart likely to take Flipkart public in as early as 4 years

Press Trust of India  |  New Delhi 

US Inc may come up with an initial public offer (IPO) of Flipkart, in which it is buying roughly 77 per cent stake, in as early as four years.

Last week, Inc announced acquisition of 77 per cent stake in for about USD 16 billion (Rs 1.05 lakh crore) in the largest deal which will give the US retailer access to the Indian that is estimated to grow to USD 200 billion within a decade.

"Pursuant to a Registration Rights Agreement to be entered into concurrently with the shareholders agreement, holders of 60 per cent of the shares held by the minority shareholders, acting together, may require to effect an following the fourth anniversary of closing of the transactions," Inc said in a regulatory filing with the

Walmart said the IPO will be at "a valuation no less than that paid by Walmart under the share issuance agreement, subject to the satisfaction of certain other conditions regarding such offering (the IPO)".

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

Flipkart's minority shareholders after the deal include Binny Bansal, China's Tencent Holdings, US hedge fund and Microsoft Corp.

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

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

The factors that hold key to the decision include the tax has to pay on profits it would earn from stake sale.

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

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

Elaborating on the deal, said the Flipkart board will initially have eight directors: five Walmart-appointed, two appointed by certain minority shareholders and one founder.

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

The US retail said it may appoint or replace the and other principal executives of the Flipkart group of companies, subject to certain consultation rights of the board and the founder.

It said 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 of first refusal for the minority shareholders will expire if Walmart owns 85 per cent of the outstanding shares of Flipkart, it added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, May 12 2018. 16:15 IST
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