Future Group has said it is facing an acute financial crisis
Future Retail Limited (FRL) has said it is difficult to finance its working capital requirements as it is going through an acute financial crisis.
The concerned retail major said in a statement that “shareholders are aware that FRL is experiencing an acute financial crisis. The pending lawsuits filed by Amazon in October 2020 and which have continued for the past year and a half have created serious impediments to the implementation of the scheme, with serious adverse consequences for the operation of the company”.
Future Retail went on to say that it is difficult to fund working capital needs as “increasing store-level losses are a major concern and create a vicious circle where larger operations lead to higher losses”.
“The company has made a loss of Rs 4,445 crore in the past four quarters. Cancellation notices have been received for a significant number of stores due to huge outstanding amounts, and we would no longer be able to access such retail operations that will help us reduce of losses in the coming months…
Previously, Future, the country’s second-largest retailer, suspended most of its online and offline operations because stores remained closed on Sunday, following Reliance’s bid to acquire its flagship supermarkets for missed lease payments, Reuters reported.
Reliance Industries will rename Future stores after the company failed to pay for them to Reliance, sources told Reuters on Saturday, closing most of the outlets of the popular Big Bazaar chain.
By February 26, Reliance Industries had taken over the operations of Future Retail stores and offered jobs to its employees.
This development came even as the Kishore Biyani-led Future Group has been embroiled in a number of court forums in a bitter battle with major e-commerce giant Amazon over the sale of its company to the retail arm of Reliance Industries.
Meanwhile, Reliance Retail has begun to take possession of the property in which Future Retail operates its stores, such as Big Bazaar, and has replaced it with its branded stores, sources close to the development said.
