According to a source familiar with the case, Reliance Industries is transferring over 30,000 Future Retail and Future Lifestyle personnel and taking over 200 Future Group outlets that are currently being rebranded as Reliance stores.
According to the source, landlords began terminating lease agreements with Future Group in 2020, and some landlords approached Reliance Industries. The latter negotiated leases with Mukesh Ambani’s company subsequently subleased to Future Group. The insolvent retailer operates approximately 1,700 stores under numerous brands such as Big Bazaar, fbb, and Central.
Future Retail reported in a stock exchange filing that it got termination notifications for many outlets due to large outstanding debts and would no longer have access to those locations. “In the coming months, the company is cutting down its operations, which will help us reduce losses.” In its IPO filing, the Kishore Biyani-led company stated, “The company is proposing to develop its online and home delivery business, to improve its access to clients.”
Reliance will rebrand the 200 outlets when Future Group cuts its store count. Reliance is also in the middle of transitioning 30,000 Future Retail and Future Lifestyle personnel to Reliance SMSL, its labor, and staffing business. Reliance SMSL’s offer letter to Future Group workers. Since February 25, Reliance SMSL has sent similar offer letters to Future Group workers (Friday).
According to a distributor who formerly supplied Future Group, he sent supplies to Future Group for six to eight months while invoicing Reliance. Reliance Industries and Future Group have yet to respond to e-mails submitted to them.
“The company has failed on its loan servicing and, as previously told, the account of the company has been designated as NPA (non-performing asset) by banks,” Future Retail said in its stock exchange statement. The continuing litigation, which began in October 2020 and has been ongoing for the past one and a half years, has posed severe impediments to the Scheme’s implementation (Future Group decided to sell its retail, logistics, and warehousing businesses to the Reliance group for nearly Rs 25,000 crore), resulting in a severe negative impact on the company’s operations.
Future Retail missed a deadline to repay its lenders of Rs 3,494.56 crore by December 31, 2021, and requested a 30-day extension but could not do so.
While the Reliance purchase remains the best option for Future Retail, lenders are attempting to restructure exposure to the business under the Reserve Bank of India’s resolution framework, according to two senior bankers. This quarter, this account has already become a non-performing asset (inability to pay principal). Its primary purpose is to meet interest payment obligations. That’s how the corporation could service the international interest payments due on the dollar bonds, thanks to domestic lenders.
According to Future Retail, the company has been embroiled in a legal battle with Amazon that began in October 2020 and has been ongoing for the past 18 months. The legal disputes, according to the corporation, generated substantial obstructions in the Scheme’s execution, resulting in a severe negative impact on the company’s operations. Future Retail also stated in the filing that it is optimistic that its agreement with Reliance will be implemented, which will benefit all parties involved.
The Delhi High Court is hearing four cases in the legal dispute between Future Group and Amazon. The National Company Law Appellate Tribunal (NCLAT) hears Amazon’s lawsuit against the Competition Commission of India’s (CCI) judgment canceling its 2019 arrangement with Future Coupons. Both cases are currently undergoing arguments and will be heard on February 28. (Monday).
Edited by- Subbuthai Padma
Published by- Radhika. N
