New Delhi:
Debt-ridden Future Group is now focused on rescuing and rebuilding companies such as – Future Lifestyle Fashions, Future Supply Chain Solutions, Future Consumer and Future Enterprises, after Rs 24,713 crore deal with Reliance Retail was rejected by secured creditors, according to industry sources.
However, Future Group’s flagship company, Future Retail Ltd (FRL), which has debt of nearly Rs 18,000 crore, is sure to face the insolvency settlement process before the National Company Law Tribunal (NCLT).
Other companies such as Future Enterprises Ltd (FEL), Future Lifestyle Fashions Ltd (FLFL), Future Supply Chain Solutions Ltd (FSCSL), Future Consumer Ltd (FCL) can survive on their own and can be rebuilt by restructuring their liabilities with using current lenders and investors, said an industry source close to the Future Group.
“FEL has more than Rs 5,000 crore of loans and as the company sells its stake in Future Generali India Insurance business. Now it is getting about Rs 3,000 crore. The deal is almost done. So that will leave a small amount of debt and that can be managed by FEL,” a source said.
FMCG company FCL has assets such as a 110-acre food park in Tumkur, Karnataka, which could be used to rebuild the business, he added.
FSCSL has warehouses across the country. In Nagpur, FSCSL has one of the largest and most automated distribution centers in India. “Therefore, the investors would like to support and rebuild these companies more,” he added.
When contacted, a spokesperson for the Future group declined to comment.
Billionaire Mukesh Ambani-led Reliance Industries Ltd on Saturday called off its Rs 24,713 crore deal to acquire Future Group’s retail, wholesale, logistics and warehousing assets after secured creditors of the Kishore Biyani-led companies voted against.
Future Lifestyle Fashions Ltd (FLFL), which manages Future Group’s main fashion business, has so far not defaulted on loan repayments and this is where the group is said to be raising money after divesting some of the few major brands in its portfolio .
FLFL has its own Central and Brand Factory chain stores, exclusive brand outlets (EBOS) and other multi-brand outlets (MBOs) from nearly a dozen clothing labels, including Lee Cooper, Champion, aLL, Indigo Nation, Giovani, John Miller, Scullers, Converse, and Urbana in her portfolio.
In addition, FLFL has also shown a very good business recovery after COVID, and operating costs of its remaining stores have fallen by more than 20 percent, the source added.
Bank of India, a financial creditor of FRL, has already filed a petition with NCLT’s Mumbai bank requesting that it initiate insolvency proceedings against the company. The public sector lender has also suggested the name of a resolution professional and put the company under a moratorium.
The insolvency judge has yet to start hearing FRL, which operates retail chains under the brands Big Bazaar, fbb, Foodhall, Easyday and Nilgiris.
In addition, FRL is also facing an insolvency petition from some of its operating creditors, such as Hindustan Coca-Cola Beverages Ltd (HCCBL).
HCCBL, the bottling plant of Coca-Cola in India, an operational creditor of FRL, has filed a plea under Article 9 of the Insolvency & Bankruptcy Code (IBC).
HCCBL’s petition will be listed on May 2, ahead of the Mumbai bank for the next hearing.
Lenders of FEL also have plans to take FEL, which last week defaulted on repaying Rs 2,911.51 crore loan repayments to its lenders, to the insolvency court, he added.
The due date for payment of Rs 2,835.65 crore was March 31, 2022. FEL had an assessment period of 30 days under the schedule of one-time restructuring (OTR) for COVID-affected companies with its consortium of banks and missed it.