Saturday, April 13

Walmart Raises $5B Revolving Credit to Fund Flipkart Acquisition Deal

A number of monetary corporations including JPMorgan Chase and Barclays are offering $5 billion financing to Walmart that will help the American giant fund its $16 billion acquisition of Indian e-commerce unicorn Flipkart.

The credit line involved would be one of the largest revolving credit facilities in the recent times as it is priced between 300-400 basis points over London Interbank Offered Rate. The facility amount will be secured against the balance sheet of Flipkart and its shares will have a tenure of 18 months.

The proposed revolving facility is an arrangement that allows buying company to facilitate the immediate acquisition financing requirements while the loans are secured against the balance sheet of the target company of its share price.

“Walmart has very strong banking traces and has already tied-up for dedicated financing. The revolving credit score line is to facilitate the quick acquisition financing necessities,” stated one of the sources familiar with the matter.

Monetary organisation such as JP Morgan and Barclays have been financial advisers to Walmart, whereas Goldman Sachs was the advisor of Flipkart. On the other hand, Hogan Lovells, and Gibson, Dunn & Crutcher have been among the authorized advisors to Walmart, while Khaitan & Co, Allen & Gledhill and Dentons Rodyk & Davidson offered authorized counsel to Flipkart.

It was just two days back when Walmart officially announced the acquisition of Flipkart for a mega $16 billion. Post the deal, eBay has decided to end its strategic partnership with Flipkart and intends to sell its holdings of 6.55% in Flipkart, worth around $1.1 billion. It is also planning to relaunch eBay India with a differentiated order to focus initially on the cross-border trade opportunity.