MUMBAI: Even as Future Group concluded e-voting of its shareholders on April 20 for getting their approval for the Rs 25,700 crore merger with RIL, State Bank of India (SBI), one of the main lenders to the group, raised concerns over takeover of Future Retail’s (FRL’s) stores by Reliance.
The concerns related to Future group having neither taken prior consent of lenders nor intimated them before surrendering the leases to the original landlords and entering into sub-leasing arrangement for the stores with Reliance Projects & Property Management Services Ltd (RPPMSL).
On Feb 25, Reliance took control of 800 stores subleased to FRL as the latter was unable to pay it rent on the same. The leases were taken over by RIL from the original landlords who FRL says terminated their leases over non-payment of dues. RPPMSL then subleased these to FRL.
“It is observed that the company has allowed the takeover of stores by RPPMSL without any demur and thereby seriously jeopardising the interest of the lenders,” the SBI letter to the Future Group says. TNIE has reviewed the letter’s contents.
It also added sales of any assets lying in the stores should be used to settle the dues with lenders first and FRL should ensure value of stocks and assets is not depleted and is insured. SBI has asked FRL to furnish it with advise on steps taken to safeguard the lenders’ interest and on the efforts taken by it to get back the assets taken over by RPPMSL. Future Group did not respond to TNIE queries on the SBI letter.
The lender has said, “All the assets of the company and its businesses (including those in the stores where leases have been terminated by RPPMSL) including but not limited to stocks , goods , fixtures, fittings, including all current and fixed assets are charged to the lenders and are subject at all times to such rights , titles and entitlements of the lenders of the company.” SBI also cited another lender Bank of India’s public notice on March 15 cautioning against any alienation of assets over which lenders hold all rights and entitlements in lieu of the unpaid dues from FRL.
Meanwhile , results of evoting of shareholders and creditors on the scheme of amalgamation with RIL is likely to be informed to stock exchanges on April 21. FRL owed banks in excess of Rs 17,000 cr in March. The payments depends on the merger deal with RIL going through, whose fate hangs in balance amid Amazon’s opposition to the same on grounds of violation of its right of first refusal to Future selling its assets. The RoFR is part of an arrangement involving Amazon purchasing stake in Future Coupons in 2019, which gave it indirect stake in FRL.