A Reliance logo can be seen in Kolkata, India
Credit: NurPhoto via Getty Images

Reliance Retail extended the deadline for Future Group’s merger by six months

Reliance Industries’ retail subsidiary, Reliance Retail Ventures Limited (RRVL), has delayed the long-stop deadline for settlement of its 24,713 crore merger with Future Group for a further six months i.e. March 31 2022, in the backdrop of the long-running legal dispute with e-commerce giant Amazon.

A Reliance logo can be seen in Kolkata, India
Credit: NurPhoto via Getty Images

Future Retail in a regulatory filing said, “Reliance Retail Ventures Limited (RRVL) extended the timeline for Long Stop Date from September 30, 2021, to March 31, 2022, which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly-owned subsidiary of RRVL.”

Previously, RRVL has pushed the Long Stop Date deadline from March 31, 2021, to September 30, 2021, according to Future Retail. A long stop date is a set date by which all deal conditions must be fulfilled before the transaction can be finalized.

Reliance Retail Ventures Ltd (RRVL) announced in August last year that it would acquire Future Group’s retail which includes supermarket chain Big Bazaar and wholesale operations, as well as its warehousing and logistics businesses, for Rs 24,713 crore.

The acquisition, however, has encountered multiple major hurdles since then, owing to Amazon’s objections. Amazon is opposing the acquisition, arguing that a prior agreement with the Future Group entitled the company to retain a stake in Future Retail at a later date. Amazon managed to buy a 49 percent stake in the unlisted Future Coupons Private Limited in 2018.

Future Coupons Ltd (which holds 7.3% of BSE-listed Future Retail via convertible warrants) has the privilege to buy into the flagship Future Retail after 3 to 10 years. Amazon then appealed to the Singapore-based Emergency Arbitrator – Singapore International Arbitration Centre (SIAC) to have the deal put on hold. Since then, the acquisition has been entangled in legal disputes.

The Emergency Arbitrator (EA) issued an interim ruling in favour of the US e-commerce giant in October, limiting Future Retail from disposing of or encumbering its assets or issuing securities to raise funds from a barred party.

Amazon and Future have also filed legal proceedings in Indian courts, including the Supreme Court, on the matter. The Supreme Court recently ruled in Amazon’s favour, concluding that the EA award was legitimate and enforceable under Indian law.

Earlier this week, in another important development, the Mumbai bench of the National Company Law Tribunal (NCLT) granted the Kishore Biyani-led Future Retail to hold extraordinary general meetings (EGMs) with their shareholders and creditors approval for its merger with Reliance Retail Ltd.

According to media reports, the NCLT bench rejected Amazon’s appeal to challenge the merger of the Future Group companies. The bench ruled that Amazon’s objection was premature and hence dismissed it. The NCLT further noted that the Supreme Court had only barred it from issuing a final decision in the case.

Amazon urged SEBI to withdraw Future-Reliance deal approval and to comply with SC decision