Future Retail, Future Enterprises default on Rs 8,158-cr loan repayments




Two leading of the Kishore Biyani-led Future Group — and Future Enterprises — on Friday collectively defaulted on loan repayments worth Rs 8,157.97 crore.


The due date for payment of Rs 2,835.65 crore by Future Enterprises Ltd (FEL) and Rs 5,322.32 crore by Ltd (FRL) was March 31, 2022.





Last year, FRL and FEL along with several other Future Group had entered into a One Time Restructuring (OTR) scheme for COVID-hit with a consortium of banks.


FRL 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 the OTR scheme 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 “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.


FEL had missed an earlier deadline on December 31, 2021 for payment of Rs 3,494.56 crore to the banks.


FEL, in a late evening filing, said it has defaulted on payment of Rs 2,835.65 crore to its consortium of banks.


The due date to “pay an aggregate amount of Rs 2,835.65 crore” to its lenders, who are parties to the agreement under the OTR scheme, was March 31, 2022.


“The Company was not able to discharge the aforesaid Obligations to banks and lenders, on Due Date,” FEL said.


However, the company said under the OTR scheme, FEL has review period of 30 days from the due date in terms of an RBI circular August 6, 2020 “The Company shall intimate the further development and updates in this connection as and when applicable,” it added.


Several Future Group companies, including FEL, have entered into agreements with their respective lenders in terms of the RBI circular dated August 6, 2020, in which a resolution framework for COVID-related stress was announced.


FEL is part of the Rs 24,713 crore deal announced by Future Group in August 2020, under which it is to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL).


All 19 companies would be consolidated into one entity — FEL — and then transferred to RRVL.


Future Group companies will be conducting meetings of their respective shareholders and creditors between April 20 to April 23, 2022 to seek their approval for the Rs 24,713 crore deal.


The deal is contested by e-commerce major Amazon and is under litigation at various forums, including the Supreme Court, Delhi High Court and Singapore International Arbitration Center.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *