Two leading companies in Kishore Biyani-led Futures Group – Future Retail and Future Enterprises – collectively defaulted on £8,157.97 billion in loan repayments on Friday.
The due date for the payment of ₹2,835.65 million by Future Enterprises Ltd. (FEL) and ₹5,322.32 million through Future Retail Ltd. (FRL) was March 31, 2022.
Last year, FRL and FEL, along with several other Future Group companies, completed a one-off restructuring program (OTR) for COVID-affected companies with a consortium of banks.
FRL said it missed the due date to repay £5,322.32 million to lenders due to ongoing legal battles with major e-commerce giant Amazon and other related issues.
Last year, FRL entered the OTR program with a consortium of banks and was required to raise 3,900 crore in capital by March 31, 2022.
“Furthermore, given the capital injection, there was a commitment for the company to be made on or before December 31,” it said.
However, the company said it was unable to raise funds through equity contribution “due to ongoing litigation with Amazon.com NV Investment Holdings LLC and other related issues.”
FEL had missed an earlier deadline of December 31, 2021 to pay 3,494.56 crore to the banks.
In a late-evening filing, FEL said it had defaulted on paying ₹2,835.65 crore to its banking consortium.
However, the company said that according to the RBI circular dated August 6, 2020 under the OTR program, FEL had a 30-day review period from the due date. “The company will gradually announce the further development and updates related to this applicable,” he added.
Several Future Group companies, including FEL, had reached arrangements with their respective lenders under the RBI circular dated August 6, 2020 announcing a resolution framework for COVID-related stress.
FEL is part of the £24,713 billion deal announced by Future Group in August 2020, whereby 19 companies active in the retail, wholesale, logistics and warehousing segments will acquire Reliance Retail Ventures Ltd. (RRVL) should be sold.
All 19 companies were to be consolidated into one entity – FEL – and then transferred to RRVL.
Future group companies will hold meetings of their respective shareholders and creditors between April 20 and April 23, 2022 to seek their approval of the £24,713 billion deal.
The deal is being challenged by e-commerce major Amazon and is the subject of litigation in various forums, including the Supreme Court, the Delhi High Court and the Singapore International Arbitration Centre.