BackFuture approaches SC to prevent lenders from declaring it a defaulter
Earlier, this month Future Retail missed the due date for payment of ₹3,494.56 crore to banks as it failed to sell its assets due to the ongoing litigation with Amazon impacting its monetisation plans
PremiumMUMBAI: Kishore Biyani-led Future Group has approached the Supreme Court to prevent its lenders from declaring its flagship company, Future Retail Ltd (FRL) a non-performing account, citing an ongoing dispute with e-commerce giant Amazon.
Future Retail has sought an extension to repay a ₹3,500 crore debt instalment to its lenders that is scheduled for 29 January. It has asked the apex court to direct the Reserve Bank of India to extend a 30-day regulatory grace period.
Future owes its lenders upwards of ₹9,000 crore. It had planned to meet its payment obligations through a slump sale to an entity of Reliance Industries Ltd for a consideration of ₹24,000 crore.
“The Petitioner No. 1 (Future Retail) was required to monetize its small format retail businesses (Easyday club and Heritage Fresh) by 31.12.2021. The proceeds from monetization of the small format retail business [i.e. ₹3,000 crore was to be utilised towards repayment of the re-structured facilities," said Future in the petition.
Earlier, this month Future Retail missed the due date for payment of ₹3,494.56 crore to banks as it failed to sell its assets due to the ongoing litigation with Amazon impacting its monetisation plans.
In August 2020, the Future group had announced ₹24,713 crore deal for sale of the retail and wholesale business, and the logistics and warehousing business to Reliance Retail Ventures Ltd, a subsidiary of Mukesh Ambani's Reliance Industries Ltd.
However, e-commerce major Amazon has contested the deal.
Amazon had argued that Future violated certain non-compete contractual terms which prohibited sale to any Mukhesh Ambani-led entity. Amazon has procured an arbitration order from an emergency arbitrator to prevent Future group from selling its retail venture and maintaining status quo.
Future Retail has also argued that the lenders default notices have been ‘erroneously issued’
“Despite Future having expressed and undeniably established its bona fide intent to adhere to the timelines prescribed in the restructuring framework. Future has also informed and explained the lenders about the orders of injunctions passed in arbitration and related proceedings initiated by Amazon.com NV Investments Holdings LLC which restrained the Future Retail from being able to sell its assets to meet its debt obligations," it said in its plea.
It added that being declared an NPA would enable lenders to initiate bankruptcy proceedings against Future Retail, which will erode the businesses' value.
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