MUMBAI: Future Group has completed the meetings with its lenders for their approval of the Rs 25,700 crore sale of its retail assets to Reliance Retail amid buzz that the lenders might not vote in requisite numbers for the merger scheme to go through without knowing Reliance’s intention on the deal, said a source.
“The lenders are wary as they need RIL’s confirmation of the deal going through,” he said. “They won’t vote for it only at the instance of Future Group.” Reliance has already taken charge of 835 stores of FRL since Feb 25 after the latter failed to make rental payments to the lessors.
These stores account for 55-60% of FRL’s revenues, while the dues to RIL, according to the source, total less than Rs 5,000 crore. “With a chunk of the stores with RIL, despite bankers like SBI and Bank Of India coming down on FRL for handing over charge without prior intimation to them, the lenders are not sure whether the deal will be consummated,” the source said.
FRL and RIL spokespersons could not be contacted for comment. For the deal to be approved, 75% of the shareholders and lenders of 21 Future group firms have to vote for it. A shortfall of the required majority in even one company by either shareholders or lenders means the deal falls apart. FRL is legally battling Amazon which is opposed to the deal on grounds that it’s investment in a promoter group company in 2019 gives it the right of first refusal on any sale of its assets by Future group.
Also, Bank of India has initiated insolvency proceedings against FRL after the latter defaulted in paying dues worth over Rs 8,800 crore by December 2021 end and March 2022 end under a one-time restructuring scheme.