NEW DELHI: Mukesh Ambani-owned Reliance Industries Ltd (RIL) has agreed to extend operational support to Future Retail Ltd to prevent its collapse while its Rs 24,713-crore deal to buy the cash-strapped retailer’s assets hangs in balance.
The retail arm of the country’s largest company in terms of market value, Reliance Retail Ventures (RRVL), has also extended the deadline for completion of the purchase by six months to accommodate for delays caused by a legal spat between Future Group and Amazon. RRVL had last August entered into an arrangement to buy Future Group’s retail assets on a slump sale basis.
“Pursuant to the provisions of scheme and other transaction documents executed in relation thereto, RRVL has in exercise of the right provided thereunder, extended the timeline for ‘’Long Stop Date’’ from March 31, 2021 to September 30, 2021 which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly-owned subsidiary of RRVL,” Future Retail said in a regulatory filing.
Long stop refers to a timeframe in which all the conditions precedent for deal are met for the transaction to be completed. The deal is facing legal hurdles and a decision from the Supreme Court is pending over the petition filed by e-commerce major Amazon. The apex court has scheduled a hearing on the case on April 27. Typically, firms set aside 3-6 months, depending on the transaction’s complexity, to secure regulatory approvals. “...it seems impossible to get all the regulatory nods before May,” said a person aware of the matter on condition of anonymity, citing legal sensitivity.
Meanwhile, the Kishore Biyani-led company has turned its attention back on retail operations. The debt-laden supermarket operator has launched a two-hour delivery service for apparel and groceries on its website or mobile app to expand into the booming e-commerce space, which is currently by the likes Walmart’s Flipkart and Amazon. It operates 1,500 retail outlets but the service is first being rolled out in select cities.