Future Retail misses ₹3,000 crore payment date to its lenders as part of RBI’s OTR scheme for Covid-hit companies

Written by corres2

Friday failed to make scheduled payments of ₹3,000 crore to its lenders as part of the central bank’s one-time restructuring (OTR) scheme for Covid-19 hit companies, people with knowledge of the matter told ET.

As per the OTR scheme signed in April this year, Future Retail was supposed to raise ₹3,000 crore by selling its nationwide small-format stores, numbering around 900. But Future Retail was unable to sell these stores to a third party since it had agreed to sell them to Reliance Industries-linked companies as part of an arrangement dated August 29, 2020.

The long-stop date to close the transaction with Reliance, which was extended twice, ends on March 31, 2022. Until then, the Future Group is bound by the 2020 agreement with

and thus cannot sell the stores to others.

The Kishore Biyani-promoted hypermarket has a one-month grace period for making the OTR payments. That grace period ends January 30. If payments are not made by then, the account would be classified as a non-performing asset (NPA) and the concessions under the OTR terms would be recalled by lenders.

That classification would apply from the date the account would have become NPA as per RBI stipulated norms if the OTR was not signed. The date of classification of NPA would vary among banks. Future Retail did not respond to ET’s mailed queries.

Future Retail has borrowings of more than Rs 10,000 crore. Those include short-term and long-term loans of about Rs 6,200 crore. Foreign currency bonds worth about Rs 3,500 crore, due in 2025, are also outstanding, as are non-convertible debentures of Rs 200 crore.

Litigation between Amazon and Future Retail has delayed the retailer’s multi-stage acquisition by Reliance Industries-linked companies. The US ecommerce giant is seeking to block Future Group’s proposed deal with Reliance Industries, claiming its earlier agreement with Future Coupon bars Future Retail from selling its assets to Reliance Group entities. The Supreme Court is scheduled to hear the matter on January 11.

The Competition Commission of India (CCI) ruling on December 17 to suspend its approval for the investment in Future Coupon has given some hope to lenders on the deal between Reliance and the Future Group, a person aware of the developments told ET. CCI said that Amazon had misled the commission about its purpose of investing in Future Coupon and directed Amazon to seek fresh approval on the deal within 60 days.

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