Walmart may end partnership with Bharti by October
10 Sep 2013
US-based retail chain Walmart Stores Inc is on the verge of pulling out from its six-year-old wholesale or cash-and-carry joint venture with the Bharti Group, even as it remains keen on expansion in India.
Several reports over the weekend suggest that the world's largest superstore chain has begun talks with other companies for its front-end retail venture in India.
Walmart is likely to announce by this month-end its decision not to convert into equities the $100 million it had lent to the Bharti Group in 2010 in a deal which Indian authorities are probing for flouting rules.
This would effectively rule out Walmart partnering with the Sunil Mittal-led group to set up megastores in India under the new rules relaxing limits on foreign investment in retail.
The deadline for converting these funds lent through compulsorily convertible debentures (CCDs) ends on 30 September.
According to one report, Walmart is likely to press for the Bharti Group to return the funds through a ''buy-back'' option.
Walmart's investment in Bharti has come under investigation on allegations that the global retail chain may have entered India's front-end multi-brand retail business two-and-a-half years before the government actually lifted the ban on foreign investors in the sector last year.
This was in addition to investments in Bharti Walmart, an equal partnership joint venture between Bharti Group and Walmart, which runs wholesale stores under the Best Price Modern Wholesale brand.
''Walmart is optimistic about growing our Best Price Wholesale cash and carry business in India as well as future retail investment opportunities that can be made possible through a clear and predictable FDI policy,'' a Walmart spokesperson said.
''As a policy, we do not comment on market speculations,'' a Bharti spokesperson said.
