U.S. retail giant Walmart Inc. said it had an option to invest an additional $3 billion in Flipkart.
In a filing with the U.S. Securities and Exchange Commission (SEC), it said: “At any time after the closing of the transactions and on or before the first anniversary of the closing, the purchaser, or any of its affiliates, may request that Flipkart issue additional ordinary shares with an aggregate purchase price of up to $3 billion. These additional ordinary shares will be issued at the same price per share as the ordinary shares issued in the share issuance, subject to adjustment for any stock splits, stock dividends or similar transactions.”
The Share Issuance Agreement and Share Purchase Agreement also contained customary termination rights for the parties, including, among others, by the purchaser if the transactions had not closed by March 9, 2019, it said. “No termination fee would be payable by any party if the Share Issuance Agreement or the Share Purchase Agreement were terminated.”
“Upon the terms and subject to the conditions set forth in the Share Issuance Agreement, Walmart will purchase ordinary shares issued by Flipkart for an aggregate purchase price of $2 billion in cash (the “Share Issuance”). Upon the terms and subject to the conditions set forth in the Share Purchase Agreement, contemporaneously with the closing of the share issuance, Walmart will purchase from the sellers preference shares and ordinary shares of Flipkart for an aggregate purchase price of approximately $14 billion in cash (the “Secondary Share Purchase,” and together with the share issuance, the “Transactions”). Immediately after the closing of the transactions, all Flipkart preference shares will convert into ordinary shares. As a result of the transactions, Walmart will initially acquire approximately 77% of the outstanding shares of Flipkart for an aggregate purchase price of approximately $16 billion,'' it further said.
It also listed with SEC the salient details of the deal. The key points are:
