78261294 – conceptual vector logo of flipkart. flipkart is an indian market e-commerce website.
Those that holds smaller share after the deal include a co-founder Binny Bansal, China’s Tencent Holding, Microsoft Corp as well as U.S. hedge fund Tiger Global Management. The deal now need to be cleared from Indian’s anti-trust regulator and is also expected to close in the later part of this year.
As part of the deal, Walmart will initially appoint five of the directors to FLipkart’s board; the minority shareholder will name two of the directors while one seat will be taken by Bansal, as stated by the filing.
Walmart likewise say that, in the future, a six board member would be appointed with the approval of majority of those directing Flipkart.
It was also stated that it could either appoint or replace Flipkart’s chief executive as well as other key executives of the group companies after making necessary consultations with the board as well as Bansal.
Walmart or its unit can likewise ask Flipkart to provide a new ordinary shares of about $3 billion before the closure of the “transaction and on or before the first anniversary of the closing”, it said. The Reuters have previously reported that there was a conversation with the parent Alphabet of Google (GOOGL.O) so as to invest around $3 billion and thus have about 15 percent stake in Flipkart. This deal can be sealed before the closure of the Walmart-Flipkart transaction or immediately after, this was reported by a source because this is a private conversation.
It was also stated by Walmart that no party would be liable to pay a termination fee if there is a termination in the purchase agreement or share issuance with Flipkart.
It was reported on Friday by the Economic Times newspaper , citing an unnamed source, that Japan’s SoftBank Group, which owns around 20 percent of FLipkart share, was thinking about its exit because of tax liabilities and the potential value it saw in Flipkart.
The chief executive of Softbank, Masayoshi Son has earlier said that the investment they had in Flipkart has increased to around $4 billion. The growth was attained after SoftBank used its Vision Fund to invest around $2.5 billion in FLipkart for duration of 9 months.
This comment has been declined by a spokesman for SoftBank in India.
Flipkart was founded in 2007 by Sachin and Binny Bansal who are former employees of Amazon, and they bagan selling books just like Amazon.