A business letter indicates that Reliance, India’s largest retailer, justified an abrupt purchase of debt-ridden competitor Future Retail ‘s outlets by citing $634 million in debt. The acquisition is part of a $900 billion retail industry battle that will see the Indian Supreme Court decide between Reliance and Amazon.com Inc.
The company’s position on the events of the night of Feb. 25, when workers unexpectedly showed up at numerous of its rivals’ outlets to seize control over overdue lease payments, Future’s actions startled Amazon, which has alleged contract violations to legally block a $3.4 billion agreement between the two Indian titans.
In the letter, Reliance claimed it went well and completely above what can be anticipated to keep Future safe taking major efforts to assure Future’s business continuity and ensure their acquisition went through.
In addition, 48 billion rupees ($634 million) in overdue lease fees and operating capital were provided. The firm took over the leases of over 900 of Future’s 1,500 locations, enabling the company to administer them.
As Future’s debts piled up and losses grew, Reliance faced “compelling circumstances” and chose to execute its legal authority to seize the outlets, the letter said. Requests for a response from Reliance and Future went unanswered.
Future, which is losing money rapidly, has previously dubbed Reliance’s decision “draconian and unilateral.” Before Amazon halted the agreement, Mukesh Ambani’s Reliance had offered a $3.4 billion proposal to purchase Future’s retail, wholesale, and logistics operations, among other companies.
Following Reliance’s unexpected acquisition of its outlets, Future asked in a letter dated March 2 whether Reliance would honour the deal’s value and conditions. Reliance mentioned this in its March 8 response to Future’s guarantee request.”The plan (agreement) will be executed according to its provisions,” it said.
Published by – Kiruthiga K
Edited by – Kritika Kashyap