The majority of lenders voted against the deal between Future Retail and Reliance Retail subsidiary of Reliance Group resulting in a crash of 20% in Future group and its subsidiary stocks. Let’s summarize it briefly… In November 2019, Amazon acquired a 49% stake in Future coupons held by Future Group which ultimately holds a 9.8% stake in Future Retail to get veto rights. Reliance Industries Ltd showed interest in the Future Group Retail business with a business acquisition cost of Rs 24,713 crore to add to its fast-expanding retail business. It planned to have access to 1800 stores spread over 420 cities in India. This deal between Reliance Industries and Future Retail showed a violation and Amazon approached SEBI, BSE, and NSE along with Singapore International Arbitration Centre to terminate this deal. Future Retail moved a plea in Delhi High Court for seeking appropriate relief against Amazon to stop interference in the deal with Reliance Industries Limited. Now let us understand the Payment Plan by Future Group. Total Outstanding loan of Rs 28,921 crore owed by 19 companies to Future Group as of January 2022. Future Group proposed to transfer debt of Rs 12,612 crore to Reliance Industries Ltd. Further, the remaining amount of Rs 16,309 crore will be repaid in tranches of this Rs 5,653 crore will be paid from proceeds to sales of assets to Reliance Industries. Rs 4,000 crore will be adjusted, Rs 2,755 crore will be paid from stake sale of Insurance companies, Rs 3,500 crore will be converted into equity and at last Rs 8,196 crore will be paid over 7.5 years. However, a few days back the majority of secured creditors voted against the resolution needed to approve Future Group’s Rs 24,713 crore scheme to sell most of its retail and logistical business to Reliance Retail. Shareholders, secured and unsecured creditors of the six listed Future Group companies voted, and as per Bank of India large lenders had rejected the proposal. Along with that Future Retail in march was surprised by the drastic and unilateral action by Reliance related to their stores which was also supported by Amazon and the lenders. Whatever the outcome Reliance will enjoy the undisputable pole position in the country’s retail sector of India’s and Future Group Founder Kishore Biyani is sealed. Thank you.
Well Articulated
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