Future Group has said it is facing serious financial crisis
Future Retail Limited (FRL) has said that it is finding it difficult to meet its working capital requirements as it is going through a severe financial crunch.
The troubled retail major said in a statement that “Shareholders are aware that FRL is going through a serious financial crisis. The company has defaulted on its debt service and as already informed, the company’s account has been declared non-refundable. The ongoing litigation initiated by Amazon in October 2020, and which has continued for the past year and a half, has created serious impediments in the implementation of the plan, resulting in serious adverse effects on the functioning of the company has had an impact.
Future Retail further explained that meeting working capital requirements is becoming increasingly difficult as “increasing losses at store level are a serious concern and it is a vicious cycle where larger operations are causing more losses”.
“The company has incurred a loss of Rs 4,445 crore in the last four quarters. Due to huge dues, termination notices have been received for a large number of stores, and now we will not be able to access such store premises. The company is reducing its operations. Which will help us in reducing the losses in the coming months… and hopefully the proposed arrangement with Reliance will be implemented which will be beneficial for all the stakeholders.”
Earlier, Future, the country’s second-largest retailer, suspended most of its online and offline operations as stores remained closed on Sunday, following Reliance’s bid to take over its flagship supermarkets to make up for missed payments. , Reuters reported.
Reliance Industries will rebrand Future Stores after the company failed to pay Reliance, sources told Reuters on Saturday, closing most outlets of the popular Big Bazaar chain.
On 26 February, Reliance Industries took over the operations of Future Retail stores and offered jobs to its employees.
The development comes even as Kishore Biyani-led Future Group is locked in a bitter battle with e-commerce major Amazon in several judicial fora over the sale of its business to the retail arm of Reliance Industries.
Meanwhile, Reliance Retail has started taking possession of the premises in which Future Retail is operating its stores like Big Bazaar and replaced them with its own brand stores, said sources close to the development.
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