Walmart can invest another $3Bn in Flipkart at the same valuation

Doug McMillon CEO of Walmart Inc. Adam Jeffery  CNBC  Getty Images

Walmart mentioned on Saturday at a filing using a USA regulator that it could require India's Flipkart people in since four decades, inventing for the very first time an expected record deadline for Walmart's largest-ever acquisition. The US giant had announced earlier this week that it would pay $16 billion for a roughly 77% stake in Flipkart, valuing the company at a little less than $21 billion.

The income tax (I-T) department has sent a letter to United States retail giant Walmart at its Bengaluru office saying it was "welcome" to approach the tax department for any clarification with regard to computing the withholding tax liability for its acquisition of stake in Flipkart.

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)".

The investment decision means that a valuation of almost $21 billion for Bengaluru-headquartered Flipkart.

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

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.

The deal now awaits clearance from India's anti-trust regulator and is expected to close later this year.

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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 said it can, in future, reconstruct a board member together with the approval of the majority of those Flipkart supervisors.

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.

That deal could be sealed before the close of the Walmart-Flipkart transaction or immediately after, a source told Reuters, declining to be named as the talks are private.

The filing also says that there are no termination fees linked with the transaction.

SoftBank had invested Dollars 2.5 billion in Flipkart and exiting the company would fetch it up to USD 4.5 billion. 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.

Previous Amazon workers Sachin and also Binny Bansal based Flipkart at 2007 and, only such as Amazon, started by attempting to sell novels.

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