FRL's lenders to meet on Saturday to decide on future course of action

This, while Future Retail has sought ten days from Supreme Court to work out a settlement for payment of dues

Lenders to troubled retail chain Future Retail will meet on Saturday to discuss next steps, including legal options, after the company sought 10 days’ time from the Supreme Court to work out a settlement.

While senior bank executives have been reviewing the case on a regular basis, Saturday’s meeting assumes significance in light of the Supreme Court hearing, banking sources said.

Executives of the Bank of India said in the media interaction after the December quarter results that the account was already being treated as a non-performing asset (NPA). The bank has proactively made 47 per cent provisioning, which is higher than requirement of 40 per cent. Its exposure is about Rs 1,047 crore.

BoI executives explained the options available before lenders, include invoking provisions of the bankruptcy law. The other option available is to invoke the personal guarantees provided for loans, the bank’s executives said.

Lenders will consider the company’s proposal if it comes up with a clear plan for repayment and not proceed with legal recourse till clarity emerges on proceedings in the Supreme Court.   

On Thursday, the consortium of 27 banks told the Supreme Court that the money lent to Future Retail belonged to the depositors. And to safeguard the “public interest”, the entire assets of FRL can be subjected to open bids by Amazon and Reliance with a reserve price of Rs 17,000 crore.

A Bench headed by Chief Justice NV Ramana is hearing FRL’s plea. The court adjourned the hearing at the request of the company.