Future Retail, Future Enterprises default on Rs 8,158-cr loan repayments

FRL said it has missed the due date for repayment of Rs 5,322.32 cr to lenders on account of the ongoing litigations with e-commerce major Amazon and other related issues

Two leading companies of the Kishore Biyani-led Future Group -- Future Retail and Future Enterprises -- on Friday collectively defaulted on loan repayments worth Rs 8,157.97 crore.

The due date for payment of Rs 2,835.65 crore by Future Enterprises Ltd (FEL) and Rs 5,322.32 crore by Future Retail Ltd (FRL) was March 31, 2022.

Last year, FRL and FEL along with several other Future Group companies had entered into a One Time Restructuring (OTR) scheme for COVID-hit companies with a consortium of banks.

FRL said it has missed the due date for repayment of Rs 5,322.32 crore to lenders on account of the ongoing litigations with e-commerce major Amazon and other related issues.

Last year, FRL had entered into the OTR scheme with a consortium of banks and was under obligation to raise Rs 3,900 crore before March 31, 2022 by way of equity contribution.

"Further, considering the infusion of capital, there was an obligation on the company to pay an aggregate amount of Rs 5,322.32 crore to various consortium banks and lenders (who are parties to the agreement under OTR Plan) on or before 31st March, 2022 ('due date')," it said.

However, the company said "due to ongoing litigations with Amazon.com NV Investment Holdings LLC and other connected issues", it was not able to raise funds by way of equity contribution.

FEL had missed an earlier deadline on December 31, 2021 for payment of Rs 3,494.56 crore to the banks.

FEL, in a late evening filing, said it has defaulted on payment of Rs 2,835.65 crore to its consortium of banks.

The due date to "pay an aggregate amount of Rs 2,835.65 crore" to its lenders, who are parties to the agreement under the OTR scheme, was March 31, 2022.

"The Company was not able to discharge the aforesaid Obligations to banks and lenders, on Due Date," FEL said.

However, the company said under the OTR scheme, FEL has review period of 30 days from the due date in terms of an RBI circular August 6, 2020 "The Company shall intimate the further development and updates in this connection as and when applicable," it added.

Several Future Group companies, including FEL, have entered into agreements with their respective lenders in terms of the RBI circular dated August 6, 2020, in which a resolution framework for COVID-related stress was announced.

FEL is part of the Rs 24,713 crore deal announced by Future Group in August 2020, under which it is to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL).

All 19 companies would be consolidated into one entity -- FEL -- and then transferred to RRVL.

Future Group companies will be conducting meetings of their respective shareholders and creditors between April 20 to April 23, 2022 to seek their approval for the Rs 24,713 crore deal.

The deal is contested by e-commerce major Amazon and is under litigation at various forums, including the Supreme Court, Delhi High Court and Singapore International Arbitration Center.