In August last year, Reliance Retail agreed to buy assets of Future Group for ₹24,713 crore. The deal was contested by Amazon, an investor in Future Coupons, which is a shareholder of Future Retail Ltd
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MUMBAI: Debt-laden Future Group on Friday received a breather to sew up its asset sale to Reliance Retail Ventures Ltd, with the Mukesh Ambani-led company extending the deal’s deadline by six more months.
In August 2020, Reliance Retail and Future Retail had set a long stop date of 31 March 2021 to complete the ₹24,713 crore transaction, which was initially extended to 30 September against the backdrop of the ongoing Future-Amazon legal tussle. Long-stop date refers to a timeframe in which all necessary conditions for the deal need to be met for the transaction to be completed.
“Reliance Retail Ventures Ltd (RRVL) has, in exercise of the right provided thereunder, extended the timeline for long stop date from 30 September 2021 to 31 March 2022, which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Ltd, a wholly owned subsidiary of RRVL," Future Enterprises Ltd said in a statement to the BSE.
The scheme of arrangement between Future and Reliance Retail entails the consolidation of Future Group’s retail, wholesale, logistics and warehousing assets into one entity —Future Enterprises Ltd— which would then be transferred to Reliance Retail.
The deal has been challenged by Amazon, an investor in Future Coupons, which is a shareholder in Future Retail Ltd.
In August 2019, Amazon bought a 49% stake in Future Coupons Ltd (which owns 7.3% equity in Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of 3 to 10 years.
Amazon approached the Singapore International Arbitration Centre (SIAC), which passed an interim award barring Future Retail from proceeding with the deal.
Amazon and Future are now fighting a legal battle in the Supreme Court, which recently ruled in favour of Amazon by holding that the SIAC award was valid and enforceable under Indian laws.