Adani, Reliance among 15 bidders in race to buy Future Retail's assets

Capri Global Holdings, OP Jindal group's Nalwa Steel and Power, Shalimar Corporation among companies expressing interest

The Adani group and Reliance Industries, India’s top business conglomerates, are among the 15 entities that have submitted their expressions of interest (EoIs) to acquire the assets of bankrupt Future Retail (FRL).

April Moon Retail, a joint venture between Adani Airport Holdings and promoters of the Flemingo group, Reliance Retail Ventures, and Dharampal Satyapal, a consumer product firm, are among the suitors, banking sources said. Capri Global Holdings, OP Jindal group’s Nalwa Steel and Power, Shalimar Corporation, UV Multiple Asset Investment Trust’s Special Situation Fund, and United Biotech had also sent in their EoIs by November 3, the extended deadline for potential buyers to submit their documents.

The Adani group, Reliance, and Nalwa Steel didn’t respond to Business Standard’s queries. 

A banking source said the EoIs did not mean these companies were eligible to bid for FRL assets, as the resolution professional had to first scrutinise and verify the papers. After scrutiny, the companies will be asked to make binding offers, and the highest weighting will be given to those making upfront cash payment to the lenders.

Financial creditors had made claims worth Rs 21,451 crore against FRL as of September 2022.

Future Retail was sent for debt resolution under the Insolvency and Bankruptcy Code after it defaulted on loans given by banks in India and abroad. Apart from the listed entities, the promoter entities of Future group founder Kishore Biyani also defaulted on loans.

As of July 20, FRL had access to 302 leased retail stores -- 30 large-format stores (Big Bazaar and FBB stores) and 272 small-format stores -- spread across 23 states and union territories, according to a notice to potential bidders.

Since February, Reliance Retail has taken control of 947 stores of the Future group after the latter’s lease agreement expired. Reliance later rebranded some of the stores as “Smart Bazaar” -- a grocery retail chain of the Mukesh Ambani-owned company.

FRL's store count does not include Foodhall and Aadhaar Wholesale stores as these are no longer operated by the group. Foodhall is now operated by a step-down subsidiary of Future Retail, while Aadhaar is operated by another company of the Future group.

Bankers said that though Covid-19 had devastated the Future group’s business, signs of financial stress were there even before the pandemic forced shut offline shopping. A Rs 24,700-crore lifeline deal to sell all group businesses to Reliance Retail in August 2020 fell through after American retail giant Amazon filed multiple litigation against Future in Singapore and in Indian courts for “failing to meet its commitment”.

Amazon had invested Rs 1,430 crore in a promoter entity of Future Retail, Future Coupons, which, in turn, held a 50 per cent stake in Future Retail. But its stake fell in the last two years as the lenders sold the pledged shares.

According to information given by Future Retail to the resolution professional, the company had 2,242 employees as of August 2022.