MUMBAI: Reliance Industries (RIL) has called off the deal to purchase the retail, wholesale, logistics and warehousing business of Future group on Saturday after secured creditors voted against the Rs 24,713 crore transaction at the NCLT. The Mukuesh Ambani firm filed an exchange filing saying the deal can’t be implemented without the backing of secured creditors.
A majority of lenders to Future Group rejected a deal involving the sale of its retail assets to RIL in NCLT, with 69.29% voting against. At least 75% vote was required for the deal to pass muster. This makes bankruptcy a strong possibility for the retailer, which owes Rs 29,000 crore to its lenders.
Secured creditors, which include banks and financial institutions, were said to have been reluctant to vote for the deal in the absence of any communication from RIL, until voting concluded on April 21. RIL’s calling off the deal means any prospective bidder for FRL has to approach the banking consortium, which holds charge on all of Future Group’s assets. Bank of India, the lead consortium lender, has already initiated insolvency proceedings against the beleaguered retailer. “Even the fixtures and inventory in the stores taken over by the landlords belong to the banks,” said a source.
The Reliance-FRL deal was inked in August 2020. Amazon, a shareholder in Future Coupons, which in turn held a stake in FRL, opposed it on grounds that it violated contacts signed between itself and Future Coupons in 2019.
BELEAGUERED RETAILER STARES AT BANKRUPTCY
A majority of lenders to Future Group rejected a deal involving the sale of its retail assets to RIL in NCLT, with 69.29% voting against. At least 75% vote was required for the deal to pass muster. This makes bankruptcy a strong possibility for the retailer