MUMBAI: Amazon, which is in discussions with the Future group to try and resolve their 18-month-long dispute out of court, would not be considering an exit as its first option, multiple informed sources told The New Indian Express. Rather, they would consider other options like investing in the group’s crown jewel FRL first, if a workable revival plan is presented as part of the ongoing negotiations.
“An exit whereby Future group pays them (Amazon) what they invested in Future Coupons plus something over and above is not the first option, it may come down the line, if at all,” said one of the sources. “The first option on the table is to discuss a possible revival plan for FRL, basis of which Amazon could consider an investment in FRL.” Samara Capital, an Amazon-backed PE firm, earlier offered to infuse Rs 7000 crore into FRL.
As this falls significantly short of the Rs 17000 crore that the Future group owes to its lenders, it’s possible that the e-commerce giant could consider “upping the ante,” if FRL’s assets “remain intact” or if the retailer presents a “feasible” revival plan, added another source. An Amazon spokesperson was not available for comment till the time of writing. To be sure, Future group is working on consummating a Rs 24713-crore deal with RIL even as the negotiations with Amazon are underway.
Reliance has already taken over some of the stores it had subleased to Future group, as per a contractual agreement, after the latter was unable to pay rent for the same. The Supreme Court gave Future group and Amazon 10 days through March 15 to find a solution to their long-standing dispute. Meanwhile, Future group has convened a meeting on April 20 to get shareholders’ approval for the RIL deal and on April 21 with the creditors for the same.
In 2019, the US e-commerce giant had invested Rs 1500 crore to pick up a 49% stake in Future Coupons, which gave it a 3.58% stake in Future Retail Limited. Amazon has opposed the 2020 deal between FRL and RIL citing that the same violates certain contractual agreements it had while buying a stake in Future Coupons. The Competition Commission of India, which approved Amazon’s stake purchase in Future Coupons, has suspended its own order on the ground that it suppressed information about the scope and purpose of the deal.