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Business News/ Companies / News/  Future Group fails to secure necessary votes on RIL deal
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Future Group fails to secure necessary votes on RIL deal

In terms of unsecured creditors, 78.22% voted in favour of the deal and 21.78% against. Besides, 85.94% shareholders of the company voted for the deal while 14.06% voted against

A file photo of people move past a Future Retail’s closed Big Bazaar retail outlet in Mumbai.  (Photo: Reuters)Premium
A file photo of people move past a Future Retail’s closed Big Bazaar retail outlet in Mumbai.  (Photo: Reuters)

MUMBAI : Debt-laden Future Group’s plan to sell its retail, wholesale, logistics and warehousing assets on a slump sale basis to Reliance Industries Ltd for 24,713 crore received a setback on Friday after it failed to secure the necessary 75% approval from secured creditors.

While more than 75% of shareholders and unsecured creditors voted in favour of the deal, secured creditors showed their disapproval with 69.29% voting against the plan and 30.71% in favour, according to a regulatory filing by Future Retail Ltd (FRL).

In terms of unsecured creditors, 78.22% voted in favour of the deal and 21.78% against. Besides, 85.94% shareholders of the company voted for the deal while 14.06% voted against.

Also, 82.75% secured creditors of group company, Future Lifestyle Fashions voted against the deal and 17.25% in favour. Among unsecured creditors, 6.07% voted against the deal while 93.93% in favour while 18.09% of shareholders voted against the deal and 81.91% in favour.

Mint reported on Thursday that a group of lenders accounting for most of the loans to Future Group rejected a proposal to sell the assets to Reliance Retail Ventures Ltd, a unit of Reliance Industries, due to lower valuations. It said that not only did Reliance lower its offer from the 24,713 crore it had agreed to in August 2020, but it also imposed a slew of conditions that must be met for the deal to proceed, even at the revised price.

One of the proxy advisors Mint spoke to, said “in a normal course, the company will have to change the terms of the deal or they will have to go back and convince the lenders to take the deal. However, the deal is likely to be postponed until the lenders or shareholders do not give a go ahead".

On 28 February, the Mumbai bench of the National Company Law Tribunal (NCLT) allowed Future Retail to convene shareholder and creditor meetings on the proposed deal with Reliance Retail. Future Group owes its lenders more than 27,000 crore.

In February, Reliance took control of multiple Future Retail outlets after terminating their leases. This incensed the lenders who issued an advertisement on 15 March indicating that anyone trading in Future Retail’s assets should keep in mind that they are liable to the lenders’ charge at all times.

Meanwhile, Future group has been taken to NCLT by state-run Bank of India for non-payment of dues.

Reliance Retail is also engaged in a legal tussle with Amazon.com Inc. over the said deal.

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ABOUT THE AUTHOR
Priyanka Gawande
Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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Published: 22 Apr 2022, 10:37 PM IST
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