Reliance provides services to Future Retail employees; bail lenders and homeowners.
Reliance Industries has intervened to rescue Future Retail Limited (FRL), took over its retail operations, and provided jobs for its employees, as the Kishore Biyani-led group is embroiled in a bitter legal dispute with Amazon’s e-commerce forums Oil-to-telecom conglomerate.
According to sources, relief Retail has begun taking over the operations of Future Retail stores such as Big Bazaar and replacing them with their stores.
Future Group finds it difficult to finance its operational needs. In a stock exchange file on February 26, Future Retail said it plans to reduce its offline performance to reduce its losses in the coming months and instead focus on expanding its online and home delivery Business.
“The company was finding it difficult to finance operational needs. Increasing losses at the retail level is a major concern and a vicious cycle in which big jobs lead to high losses,” he added.
The company lost Rs 4,445 crore over the past four quarters. Many stores have received termination notices due to the high cost, and they will no longer access those store buildings.
The sales officer also announced that the long-term suspension of its planning with Reliance Industries had been extended to September 30.
“The company hopes that the proposed plan and Reliance will be implemented, which will be useful to all stakeholders,” he said.
In August 2020, the boards of Future Retail Ltd, Future Group companies, and Reliance Retail Ventures Ltd (RRVL) approved the Scheme of Arrangement to transfer Future Group’s retail and transportation business to RRVL on a commercial basis. Of the descent to process the whole thing. Rs 24,713 million.
At the time of the agreement, Future Group was in dire financial straits. It had failed to pay its mortgages and landlords for its leased properties. Debts leftover from debtors and homeowners exceeded a staggering Rs 6,000 crore.
At the same time, Amazon began suing for the Future-Reliance deal. From the Supreme Court to the Delhi High Court, from the company’s legal tribunal to the Singapore appeals panel and arbitration team, Amazon has reached into its deep pockets to block the planning process where the Future crew would be rescued under Reliance Retail. It’s affected the creditors and homeowners of Future Retail.
According to people close to the development, Future Group would lose a lot of its value and go into debt if the situation continued.
Unable to bear the burden of non-payment, many homeowners terminated their lease agreements with FRL in January 2021.
Sources said it was in these dire circumstances that a few FRL homeowners, unaware of the Planning process as it was public, approached Reliance for support. Because of the situation, sources said, Reliance took several steps to enable FRL to continue operating, avoiding the possibility of becoming debt-free.
Reliance guaranteed the payment of rent to many homeowners by signing lease agreements for their properties and, at the same time, enabling FRL to continue operating on these properties.
Reliance has cost more than Rs 1,500 crore in arrears, according to each source.
According to sources, it also extended operating funding to FRL, with which FRL can pay its legal payments, return interest and simultaneous charges to banks, and continue its business activities. To date, Reliance has lent Rs 3,700 crore to FRL to operate the company, said people close to the development.
However, despite Reliance support, FRL lost more than Rs 4,445 crore in the 2021 calendar year. Therefore, to help FRL compensate for its losses, they added that Reliance exercises its regulatory and administrative rights for FRL losses.
Edited by- Subbuthai Padma
Published by- Radhika. N
