Two leading companies of the Kishore Biyani-led Future Group – Future Retail and Future Enterprises – collectively defaulted on Friday in repaying loans worth ₹8,157.97 crore.
The due date for payment of ₹2,835.65 crore by Future Enterprises Ltd. (FEL) and ₹5,322.32 crore by Future Retail Ltd. (FRL) was March 31, 2022.
Last year, FRL and FEL, along with several other Future Group companies, had entered into a one-time restructuring (OTR) scheme for COVID-affected companies with a consortium of banks.
FRL said it had missed the due date for refund of ₹5,322.32 crore to lenders due to the ongoing lawsuits with e-commerce major Amazon and other related issues.
Last year, FRL had entered into the OTR scheme with a consortium of banks and was required to raise ₹3,900 crore through its own contribution before March 31, 2022.
“In addition, given the contribution of capital, the company was required to pay a total amount of ₹5,322.32 crore to various syndicate banks and lenders (party to the agreement under the OTR plan) on or before March 31, 2022.” it said.
However, the company said “due to pending lawsuits with Amazon.com NV Investment Holdings LLC and other related issues”, it was unable to raise funds through its own contribution.
FEL had missed an earlier deadline on December 31, 2021 for payment of ₹3,494.56 crore to the banks.
In a late evening filing, FEL said it had defaulted on the payment of ₹2,835.65 crore to its consortium of banks.
However, the company said that under the OTR scheme, FEL had a 30-day assessment period from the expiration date in terms of an RBI circular dated August 6, 2020. “The company will announce further development and updates in this regard as and when appropriate. it added.
Several Future Group companies, including FEL, had agreements with their respective lenders in terms of the August 6, 2020 RBI circular, announcing a resolution framework for COVID-related stress.
FEL is part of the ₹24,713 crore deal announced by Future Group in August 2020, whereby it would sell 19 companies operating in the retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd. (RRVL).
All 19 companies would be consolidated into one entity – FEL – and then transferred to RRVL.
Future group companies will hold meetings with their respective shareholders and creditors between April 20 and April 23, 2022 to seek their approval for the ₹24,713 crore deal.
The deal is being contested by e-commerce major Amazon and is being litigated in several forums, including the Supreme Court, Delhi High Court and Singapore International Arbitration Center.