Two leading companies of the Kishore Biyani-led Future Group – Future Retail and Future Enterprises – on Friday collectively defaulted on loan repayments worth ₹8,157.97 crores.
The due date for payment of ₹2,835.65 crores by Future Enterprises Ltd. (FEL) and ₹5,322.32 crore by Future Retail Ltd. (FRL) was March 31, 2022.
Debt-ridden Future Retail Ltd (FRL) on Friday said it has missed the due date for repayment of Rs 5,322.32 crore to lenders on account of the ongoing litigations with e-commerce major Amazon and other related issues.
Last year, FRL had entered into a One Time Restructuring (OTR) scheme for COVID-hit companies with a consortium of banks and was under obligation to raise Rs 3,900 crore before March 31, 2022, by way of equity contribution.
“Further, considering the infusion of capital, there was an obligation on the company to pay an aggregate amount of Rs 5,322.32 crore to various consortium banks and lenders (who are parties to the agreement under OTR Plan) on or before 31st March 2022 (‘due date’),” it said.
However, the company said that “due to ongoing litigations with Amazon.com NV Investment Holdings LLC and other connected issues”, it was not able to raise funds by way of equity contribution.
The Future Group firm had missed an earlier deadline on December 31, 2021, for payment of Rs 3,494.56 crore to the banks.
Store Takeover
This has also forced Reliance Retail Ventures Ltd (RRVL), the retail arm of Reliance Industries, to go for an extension of the long-stop date for the scheme for completing the deal with the Future Group.
In February, RRVL took over the operations of at least 300 stores of FRL and has offered jobs to its employees after the Kishore Biyani-led group failed to make lease payments to landlords.
Last month, FRL said it is “committed” to the reversal of the takeover of its stores by RRVL and take all such action as may be necessary to seek value adjustments.
In April, Future Group companies will be conducting meetings with their respective shareholders and creditors between April 20 to April 23, 2022, to seek their approval for the Rs 24,713 crore deal.
Future Blaming Amazon
Future Retail told the Supreme Court that “Amazon wanted to destroy us, and it succeeded,” as the bitter and long-running legal battle continues, with the next hearing scheduled for April 4.
After talks between Amazon Inc. and Future Retail Ltd. (FRL) to resolve and come to an out of court settlement failed, Reliance Industries Limited (RIL) took over hundreds of stores of the Kishore Biyani-led group last month on unpaid rents mounting up to ₹ 4,800 crores, the accusing-and-the retort continues.
While Amazon has also accused Future Retail and RIL of “fraud”, Future group said on Thursday, “for ₹ 1,400 crores (worth of the Amazon-Future disputed deal), Amazon has destroyed a ₹ 26,000 crores company. Amazon has been successful in what it wanted to do.
Amazon said the transfer of Future Retail’s assets looks like “Ripley’s Believe It or Not” FRL let go of over 800 shops without any protest.
But Future Retail said it could not pay rents and had to surrender its stores ultimately. No payments can be made from our accounts as they have been frozen due to NPA classification, said the company.
However, Amazon said, Future’s claims that it is short of money and could not pay lease rental is a strategy and a sham and submitted that the Supreme Court must restrain any alienation of Future assets until the Arbitral Tribunal decides the case.
