Home >Companies >News >Future to pay missed interest by Monday

MUMBAI/NEW DELHI : Kishore Biyani’s flagship company Future Retail Ltd, which runs the popular supermarket chain BigBazaar, is likely to pay interest on its dollar bonds by Monday, after missing the payment deadline nearly a month ago, two people aware of the development said requesting anonymity.

On 22 July, Future Retail informed stock exchanges that it had missed paying $14 million (approximately 105 crore) interest due on bonds worth $500 million due in 2025, which it had raised in January. To be sure, the miss did not constitute a default, as the terms of the bonds allow for a 30-day grace period; if the company still does not make the payment by then, it will be classified as default.

According to the first person, it can technically make the payment till Monday, as the deadline is 22 August, which is a holiday. The person added that the company should be able to make the payments as the funds are getting arranged.

An email sent to Future Retail remained unanswered.

On Thursday, Bloomberg reported that Future Retail is in discussions with lenders led by State Bank of India to raise cash to help pay the interest on the dollar security, but the banks had declined to commit to the financing.

Future Retail blamed the covid-19 pandemic and the nationwide lockdown that followed for its inability to make timely interest payments.

“We would like inform that due to the nationwide lock down imposed to restrict the spread of covid-19 pandemic, and consequent restricted business operations of the company the liquidity position has been affected causing us to miss the service of the payment of interest due on the USD Notes (listed on Singapore Stock Exchange) on 22nd July, 2020," the company said in its exchange filing last month.

The liquidity troubles of the company come at a time when Biyani is in advanced discussions with Mukesh Ambani, to sell a part of his retail empire, including the flagship Future Retail.

On 11 June, Mint reported that Ambani is among the front-runners expected to snap up controlling stakes in Future Retail and Future Lifestyle Fashion Ltd, the apparel retail business of the group. Other group businesses such as Future Supply Chain Solutions Ltd and its stake in an insurance joint venture are also up for sale.

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