NEW DELHI: The Mumbai bench of the National Company Law Tribunal (NCLT) has ordered liquidation of Future Retail as all the resolution bids have failed with the lenders after the committee of creditors led by Bank of India, opted for liquidation of the company that was once the poster boy of modern restock in the country.
This will be a big blow to lenders as the company has negligible assets to be sold off and recover the dues. Most of the yielding stores were taken over by Reliance after its aborted bid d to buy the company out. Even through resolution banks were on average getting only about under a third of their dues so far and liquidation means at least 90% loss or hair cut as in the banking parlance.
The lenders took Kishore Biyani who sold himself as the pioneer of modern retail in this part of the world and labelled himself as the Indian version of Sam Walton of the Walmart fame in the US, to the insolvency court in April 2022 after it failed to repay the lenders following Reliance Retail’s refusal to honour its Rs 23400 crore takeover offer. The retail firm owes more than Rs 17,000 crore to both its financial and operational creditors.
The NCLT order on Monday comes after the resolution professional failed to get any resolution applicants to turn around the insolvent company. It’s the end of the road for Kishore Biyani-led Future Retail, which once led domestic organized retail revolution. Liquidation means setting in motion a process that will see its assets being sold to pay off its dues. The bench appointed Sanjay Gupta as the liquidator.