Samara Capital has shown interest in buying Future Retail’s businesses
New Delhi:
Amazon told Future Retail Ltd (FRL) to put on notice to confirm capital infusion to prevent an emerging loan default after Samara Capital was buying the business of a debt-ridden retailer such as Big Bazaar for Rs 7,000 crore. is interested in.
Asked by independent directors of FRL to confirm whether it will invest Rs 3,500 crore in the cash-strapped retailer to enable it to pay back its lenders by the January 29 due date, Amazon wrote to them. FRL must provide its financial statements to Samara Capital. Private Equity Fund to conduct a quick due diligence.
“We confirm that on the basis of your letter dated January 21, 2022, Samara Capital has once again reiterated to us that they wish to carry forward and carry forward the term sheet dated June 30, 2020 signed between Samara, FRL and the Promoters. are willing and committed to FRL, which considers the purchase of (Rs 7,000 crore),” Amazon said in a January 22 letter to independent directors of FRL.
However, Amazon did not explain why Samara Capital was confirming this to the US firm instead of speaking directly to FRL.
Samara Capital, which in June 2020 had signed a non-binding term sheet to acquire FRL’s businesses including Big Bazaar, Easyday and Heritage, among other chains, for Rs 7,000 crore, was free to confirm the offer. could not be reached from
An email sent to Amazon asking why Samara Capital was communicating with it and not with Future Retail directly remained unanswered.
Emails sent to Future and Reliance also remained unanswered till the filing of the story.
According to sources, Amazon is trying to facilitate the deal between Samara and FRL to protect its own investment in Futures, and ensure that FRL does not transfer its prohibited assets to Reliance Retail or to entities prohibited pursuant to the original contract. does not sell.
Amazon said in its January 22 letter: “The transaction envisaged in the Samara term sheet will ensure the availability of funds in FRL at the earliest through an asset sale and an equity infusion, which will be a direct antidote to FRL’s indebtedness”.
While Amazon is opposed to billionaire Mukesh Ambani’s conglomerate acquiring FRL’s businesses along with other group companies for Rs 24,713 crore, it seemed open to taking over the business of Samara Capital.
The Amazon letter, a copy of which was seen by PTI, claimed that the association with Samara would not affect the arbitration proceedings on transfer/encumbrance of retail properties of FRL and the binding nature of injunctions passed by Indian courts.
It said the new transaction would have the understanding that “the transaction with the Mukesh Dhirubhai Ambani (Reliance Industries Limited) Group (MDA Group) will not proceed or be processed; and all assistance through legally compliant structures.” Will”.
Amazon argued that the structure with Samara is also similar to the proposed acquisition of the retail and wholesale venture of Future Group (which includes FRL’s retail assets) by Reliance Retail and Fashion Lifestyle Ltd (RRFLL).
“We understand that the business operations of this entity are negligible and whose parent entity Reliance Retail Ventures Limited (RRVL) has received at least Rs 47,265 crore from various foreign investors. We also understand that this amount is proposed to be used for acquisition of retail, wholesale and logistics assets of FRL.”
It further said that transactions involving FRL and constituents of the MDA group, such as RRVL and RRFLL, follow a “similar structure”.
The letter said that the Samara term sheet provides for the acquisition of all retail assets of FRL, including a “small store format” containing “Easy Day”, “Aadhaar” and “Legacy” brands, through an Indian owned and controlled entity structure. Is. Led by Samara and backed by Amazon.
Amazon has requested independent directors to provide Samara an opportunity to conduct due diligence of FRL.
“If access may be granted in respect of all financial, tax, regulatory, operational, licensing, assets, encumbrances, material contracts, material liabilities, material litigation, material investigations and similar data that has been shared with MDA Group Thi, Samara is ready to start the Due Diligence exercise from Sunday, 23rd January, 2022 and complete it expeditiously.”
Future and Amazon have been locked in a bitter legal tussle after US e-commerce giant Future Group dragged Future Group to arbitration at the Singapore International Arbitration Center (SIAC) in October 2020, arguing that FRL had struck a deal. had breached their contract by entering. Billionaire Mukesh Ambani’s sale of his assets to Reliance Retail on the ground of recession.
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