media statement from bharti and...
TRANSCRIPT
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Contact: IndiaArti Singh/Lavang Khare Phone: +91 124-4986845 Email: [email protected] Contacts: US & International Media: Kevin Gardner/Anthony Rose US phone: 1-800-331-0085 International phone: +1-479-273-4314 Asia phone: +852 6307 0088 Email: https://news.walmart.com/reporter/ Investors: Carol Schumacher, +1-479-277-1498
MEDIA STATEMENT FROM BHARTI AND WALMART
New Delhi, October 9, 2013 – Bharti Enterprises and Wal-Mart Stores, Inc. announced today that they have reached an agreement to independently own and operate separate business formats in India and discontinue their franchise agreement in the retail business. The agreement is subject to finalization of definitive agreements and receipt of the requisite regulatory approvals.
Upon receipt of required clearances, Walmart would acquire Bharti’s stake in Bharti Walmart Private Limited, a joint venture between Bharti and Walmart, giving Walmart 100 percent ownership of the Best Price Modern Wholesale cash and carry business. Walmart plans to continue to grow this business while working with the government and interested stakeholders to create conditions that enable foreign direct investment in multi-brand retail.
As part of the proposed transactions, Bharti will acquire the Compulsory Convertible Debentures (CCDs) held by Walmart in Cedar Support Services, a company owned and controlled by Bharti. Bharti Retail will continue to operate ‘easyday’ retail stores across all formats and invest in and grow the business.
Rajan Bharti Mittal, Vice Chairman and MD, Bharti Enterprises said: “Bharti is committed to building a world-class retail venture and will continue to invest in Bharti Retail across all formats. We believe that with our current footprint of 212 stores, we have a strong platform to significantly grow the business and delight customers. We wish Walmart the very best for the future.”
Speaking on the occasion, Scott Price, President and CEO Walmart Asia said: “Given the circumstances, our decision to operate independently will be beneficial to both parties. Through Walmart’s investment in India, including our cash and carry business, supply chain infrastructure, direct farm program and supplier development, we want to serve India and its people, and continue to make important social and environmental contributions to the country. Walmart is committed to businesses that serve our members and provide good returns for our shareholders, and we will continue to advocate for investment conditions that allow FDI multi-brand retail in India. We wish Bharti well as they grow their retail business.”
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About Wal-Mart Stores, Inc.
Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better -- anytime and anywhere -- in retail stores, online, and through their mobile devices. Each week, more than 245 million customers and members visit our 10,955 stores under 69 banners in 27 countries and e-commerce websites in 10 countries. With fiscal year 2013 sales of approximately $466 billion, Walmart employs more than 2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting http://corporate.walmart.com, on Facebook at http://facebook.com/walmart and on Twitter at http://twitter.com/walmartnewsroom. Online merchandise sales are available at http://www.walmart.com and http://www.samsclub.com.
About Bharti Enterprises:
Bharti Enterprises is one of India’s leading business groups with interests in telecom, agri business, financial services, retail and manufacturing. Bharti has been a pioneering force in the Indian telecom sector with many firsts and innovations to its credit. Bharti Airtel Limited, the group's flagship company, is a leading global telecommunications company with operations in 20 countries across Asia and Africa. The Company ranks amongst the top 4 mobile service providers globally in terms of subscribers.
Other business ventures of the group include Bharti Softbank - a JV between Bharti Enterprises and Softbank Corp - for mobile internet. Beetel Teletech, a group company, is India’s leading manufacturer and distributor of telecom and allied products. The group has a JV –FieldFresh Foods – with Del Monte Pacific Ltd, to offer fresh and processed fruits and vegetables in the domestic as well as international markets. Bharti has JVs with AXA, world leader in financial protection and wealth management, for Life Insurance and General Insurance. The group has presence in the retail sector through Bharti Retail that operates stores in multiple formats. It also has a JV - Bharti Wal-Mart - with Wal-Mart for wholesale cash-and-carry and back-end supply chain management operations in India.
Government of IndiaMinistry of Commerce & Industry
Department of Industrial Policy & Promotion(FC-I Section)
Press Note No.5 (2012 Series)
Subject: Review of the policy on Foreign Direct Investment- allowing FDI in Multi-Brand RetailTrading.
1.0 Present Position:
Foreign Direct Investment (FDI) is prohibited in retail trading, except in single-brand productretail trading, in which FDI, up to 100%, is permitted, under the Government route, subject tospecified conditions.
2.0 Revised Position:
The Government of India has reviewed the extant policy on FDI and decided to permit FDI,up to 51%, under the Government route, in Multi-Brand Retail Trading, subject to specifiedconditions.
3.0 Accordingly, the following amendment is made in 'Circular 1of 2012- Consolidated FDIPolicy', issued on 10.04.2012, by the Department ofIndustrial Policy & Promotion:
3.1 Paragraph 6.1 - 'Prohibited Sectors', is substituted with the following:
"6.1 PROHIBITED SECTORS:
FDI is prohibited in:
(a) Lottery Business, including Government /private lottery, online lotteries, etc.(b) Gambling and Betting, including casinos etc.(c) Chit funds(d) Nidhi company(e) Trading in Transferable Development Rights (TDRs)(f) Real Estate Business or Construction of Farm Houses(g) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco
substitutes(h) Activities / sectors not open to private sector investment e.g. Atomic Energy and Railway
Transport (other than Mass Rapid Transport Systems).
Foreign technology collaboration in any form, including licensing for franchise,trademark, brand name, management contract, is also prohibited for Lottery Business andGambling and Betting activities."
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3.2 A new paragraph as paragraph 6.2.16.5 is inserted below paragraph 6.2.16.4 as below:
6.2.16.5 Multi Brand Retail Trading I 51% I Government(l) FDI in multi brand retail trading, in all products, will be permitted,
subject to the following conditions:
(i) Fresh agricultural produce, including fruits, vegetables, flowers,grains, pulses, fresh poultry, fishery and meat products, may beunbranded.
G) Minimum amount to be brought in, as FDI, by the foreign investor,would be US $ 100 million.
(iii) At least 50% of total FDI brought in shall be invested in 'backendinfrastructure' within three years of the first tranche of FDI, where'back-end infrastructure' will include capital expenditure on allactivities, excluding that on front-end units; for instance, back-endinfrastructure will include investment made towards processing,manufacturing, distribution, design improvement, quality control,packaging, logistics, storage, ware-house, agriculture market produceinfrastructure etc. Expenditure on land cost and rentals, if any, willnot be counted for purposes of back end infrastructure.
(iv) At least 30% of the value of procurement of manufactured! processedproducts purchased shall be sourced from Indian 'small industries'which have a total investment in plant & machinery not exceeding US$ .1.00 million. This valuation refers to the value at the time ofinstallation, without providing for depreciation. Further, if at any pointin time, this valuation is exceeded, the industry shall not qualify as a'small industry' for this purpose. This procurement requirement wouldhave to be met, in the first instance, as an average of five years' totalvalue of the manufactured! processed products purchased, beginning1st April of the year during which the first tranche of FDI is received.Thereafter, it would have to be met on an annual basis.
(v) Self-certification by the company, to ensure compliance of theconditions at serial nos. (ii), (iii) and (iv) above, which could be cross-checked, as and when required. Accordingly, the investors shallmaintain accounts, duly certified by statutory auditors.
(vi) Retail sales outlets may be set up only in cities with a population ofmore than 10 lakh as per 2011 Census and may also cover an area of10 kms around the municipal/urban agglomeration limits of suchcities; retail locations will be restricted to conforming areas as per theMaster/Zonal Plans of the concerned cities and provision will be madefor requisite facilities such as transport connectivity and parking; InStates/ Union Territories not having cities with population of morethan 10 lakh as per 2011 Census, retail sales outlets may be set up in
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(vii) Government will have the first right to procurement of agriculturalproducts.
the cities of their choice, preferably the largest city and may also coveran area of 10 kms around the municipal/urban agglomeration limits ofsuch cities. The locations of such outlets will be restricted toconforming areas, as per the Master/Zonal Plans of the concernedcities and provision will be made for requisite facilities such astransport connectivity and parking.
(viii) The above policy is an enabling policy only and the StateGovernmentslUnion Territories would be free to take their owndecisions in regard to implementation of the policy. Therefore, retailsales outlets may be set up in those StateslUnion Territories whichhave agreed, or agree in future, to allow FDI in MBRT under thispolicy. The list of StateslUnion Territories which have conveyed theiragreement is annexed. Such agreement, in future, to permitestablishment of retail outlets under this policy, would be conveyed tothe Government of India through the Department of Industrial Policy& Promotion and additions would be made to the annexed listaccordingly. The establishment of the retail sales outlets will be incompliance of applicable StatelUnion Territory laws/ regulations, suchas the Shops and Establishments Act etc.
(ix) Retail trading, in any form, by means of e-commerce, would not bepermissible, for companies with FDI, engaged in the activity of multi-brand retail trading.
(x) Applications would be processed in the Department of Industrial Policy& Promotion, to determine whether the proposed investment satisfiesthe notified guidelines, before being considered by the FIPB forGovernment approval.
4.0 The above decision will take immediate effect.
Joint Secretary toD/o IPP File No.: 5/12//201O-FC-I dated: 20th September, 2012
Copy forwarded to:
1. Press Information Officer, Press Information Bureau- for giving wide publicity to the abovePress Note.
2. BE Section in the Department of Industrial Policy and Promotion- for uploading the PressNote on DIPP's website.
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ANNEXURE
LIST OF STATES/ UNION TERRITORIES AS MENTIONED INPARAGRAPH 6.2.16.5(l)(viii)
1. Andhra Pradesh
2. Assam
3. Delhi
4. Haryana
5. Jammu & Kashmir
6. Maharashtra
7. Manipur
8. Rajasthan
9. Uttarakhand
10. Daman & Diu and Dadra and Nagar Haveli (Union Territories)
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