India’s future eyes bankruptcy as lenders reject $3.4bn asset sale to Reliance

0

Workers rest in front of a Reliance Industries Limited advertisement at a construction site in Mumbai, India, March 2, 2016. REUTERS/Shailesh Andrade

Join now for FREE unlimited access to Reuters.com

Register

MUMBAI, April 22 (Reuters) – Secured lenders to India’s Future Retail on Friday rejected a $3.4 billion sale of its retail assets, dealing a blow to the business which is now facing the prospect of a bankruptcy process.

Nearly 70% of Future Retail’s secured lenders rejected the agreement to sell the group’s assets to market leader Reliance Industries (RELI.NS), it said in a stock market filing.

“The deal fell through. There’s no coming back from here for Future,” said a person with direct knowledge of the voting process.

Join now for FREE unlimited access to Reuters.com

Register

The deal did not receive the required 75% favorable votes from secured creditors, the source added.

Reliance did not respond to requests for comment.

The rejection by the lenders comes amid a legal challenge by US e-commerce giant Amazon.com Inc (AMZN.O) which has accused Future of breaching certain contracts by dealing with Reliance, run by the most rich man from India, Mukesh Ambani.

Reliance in 2020 had sought to buy Future’s retail, wholesale and other assets in a $3.4 billion deal after Future was hit hard by the pandemic.

But Amazon soon won legal injunctions that blocked Future’s deal with Reliance, sparking a series of legal battles in various forums, including an arbitration panel in Singapore.

In February, Reliance, which had stood aside earlier in the dispute, suddenly took control of hundreds of Future stores, citing non-payment of rent, after assuming numerous leases held by Future at short notice. silver. Read more

This spooked bankers, some of whom have already initiated debt collection proceedings against Future.

Future Group as a whole has more than $4 billion in debt and lenders have started classifying loans as non-performing assets (NPA).

Lenders are preparing for a long battle in bankruptcy court that may take years to resolve, sources told Reuters earlier on Friday.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Abhirup Roy and Aditya Kalra, additional reporting by Nupur Anand and Gaurav Dogra Editing by Kim Coghill, Mark Potter and Louise Heavens

Our standards: The Thomson Reuters Trust Principles.

Share.

About Author

Comments are closed.