Two leading companies of the Kishore Biyani-led Future Group – Future Retail Limited (FRL) and Future Enterprises Limited (FEL) – collectively defaulted on Friday in repaying loans worth Rs 8,157.97 crore.
The due date for payment of Rs 2,835.65 crore by FEL and Rs 5,322.32 crore by 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 has missed the due date for refund of Rs 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 Rs 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 Rs 5,322.32 crore to various consortium banks and lenders (party to the agreement under the OTR plan) on or before March 31, 2022 (‘due date’),’ 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 Rs 3,494.56 crore to the banks.
FEL said in a late evening filing that it had defaulted on the payment of Rs 2,835.65 crore to its consortium of banks.
The due date to “pay a total amount of Rs 2,835.65 crore” to its lenders, which are parties to the agreement under the OTR scheme, was March 31, 2022.
“The company was unable to meet the aforementioned obligations to banks and lenders at maturity,” FEL said.
However, the company said under the OTR scheme that FEL has a 30-day assessment period from the expiration date in terms of an August 6, 2020 RBI circular “The company will announce further development and updates in this regard as and when appropriate.” , it added.
Several Future Group companies, including FEL, have entered into agreements with their respective lenders in terms of the Aug. 6, 2020 RBI circular, announcing a resolution framework for COVID-related stress.
FEL is part of the Rs 24,713 crore deal announced by Future Group in August 2020, whereby it is to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL).
All 19 companies would be merged 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 of the Rs 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.