Business

Bankruptcy As A Reality For Future Retail Secured Creditors Reject Reliance Deal: Key Highlights

April 23, 2022
Bharat Times

Future Retail headed for bankruptcy as secured creditors reject Reliance deal

Future Retail Ltd is headed for bankruptcy as its secured creditors rejected the Reliance deal this week. The future of the company and the management is uncertain as Bank of India initiated insolvency proceedings last week.

Here’s your 10-point guide to the story:

  1. Secured creditors of a number of Future Group listed entities – primarily banks and financial institutions Voted against Reliance Retail deal 24,713 crore, according to a regulatory filing on Friday.

  2. While over 75 per cent shareholders and unsecured creditors voted in favor of Mukesh Ambani’s Reliance Retail deal, nearly 70 per cent secured creditors rejected the deal and over 30 per cent of the remaining voted in favor of it. Results presented to stock exchanges.

  3. To complete the Reliance deal, Future Retail needed 75 per cent approval from its secured creditors, which it failed to achieve.

  4. To avoid bankruptcy, Future Group of Companies had called a meeting of its shareholdersUnder which it plans to sell 19 companies operating in retail, wholesale, logistics and warehousing segments – under which it plans to sell Reliance Retail Ventures Ltd (RRVL) – to secured and unsecured creditors to get approval for the deal.

  5. Bank of India had moved the National Company Law Tribunal (NCLT) by filing a petition to initiate insolvency proceedings After the company last week against debt-ridden Future Retail default on its payment to lenders Due to a long-running legal dispute with Amazon.

  6. Amazon Inc. was Opposition to the meetings of the Future Group of Companies Approval of Reliance deal A bitter and protracted legal battle is going on between Amazon and Future Retail. Amazon opposes the Future-Reliance deal as it was against the 2019 agreement with FRL’s promoter arm, FCPL – through which it acquired a 49 per cent stake in FCPL for about Rs 1,500 crore.

  7. Amazon also dragged FRL and its promoters to the Singapore International Arbitration Center (SIAC), where the emergency arbitrator passed an interim order in Amazon’s favor in October 2020, preventing FRL from taking any further steps until the matter is decided.

  8. Amazon has initiated several lawsuits against FRL before the Delhi High Court, Supreme Court and NCLT.

  9. FRL told the Delhi High Court,Rs 1,400 crore (Amazon-future disputed deal worth), Amazon has liquidated a company worth Rs 26,000 crore. Amazon wanted to destroy us, and it succeeded. Amazon has been successful in what it wanted to do.”

  10. in February, Reliance Retail took over operations of at least 350 stores Responding to the Kishor Biyani-led group following a default in lease payments by FRL, Amazon had said that the transfer of Future Retail’s assets “looks like a ripple; believe it or not,” FRL raised 800 without protest. Let go of more shops.