Bankruptcy A Reality For Future Retail As Secured Creditors Reject Reliance Deal: Key Highlights

Secured creditors - primarily banks and financial institutions - of several listed entities of Future Group voted against the Reliance Retail deal worth Rs 24,713 crore, according to a regulatory filing on Friday. While over 75 per cent of shareholders and unsecured creditors had voted in favour of the Mukesh Ambani's Reliance Retail deal, nearly 70 per cent of secured creditors rejected the deal and the remaining a touch over 30 per cent voted in favour of it, as per the results submitted to stock exchanges. To get the Reliance deal through, Future Retail needed 75 per cent approval from its secured creditors, which it failed to get. To stave off bankruptcy, the Future Group of companies had called meetings of their shareholders, secured and unsecured creditors to get the approval for the deal - under which it plans to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL). Bank of India had moved the National Company Law Tribunal (NCLT), filing a petition to initiate insolvency proceedings against debt-ridden Future Retail last week after the company defaulted on its payments to lenders because of the long-running legal feud with Amazon. Amazon Inc had opposed the Future Group of companies' meetings to approve the Reliance deal. Amazon and Future Retail have been in a bitter and long-running legal battle. Amazon opposes the Future-Reliance deal because it was against its 2019 agreement with FCPL, the promoter entity of FRL - through which it acquired a 49 per cent stake in FCPL for about Rs 1,500 crore. Amazon also dragged FRL and its promoters to the Singapore International Arbitration Center (SIAC), where the Emergency Arbitrator passed an interim order in favour of Amazon in October 2020, stopping FRL from taking any further steps until the case is decided. Amazon has initiated various litigations against FRL - before the Delhi High Court, the Supreme Court, and the NCLT. FRL had told the Delhi High Court, "for Rs 1,400 crores (worth of the Amazon-Future disputed deal), Amazon has destroyed a Rs 26,000 crores company. Amazon wanted to destroy us, and it succeeded. Amazon has been successful in what it wanted to do." In February, Reliance Retail had taken over the operations of at least 350 stores of the Kishore Biyani-led group after FRL defaulted on its lease payments. Amazon, in response, had said the transfer of Future Retail's assets looks like "Ripley's; believe it or not," FRL let go of over 800 shops without any protest.

Bankruptcy A Reality For Future Retail As Secured Creditors Reject Reliance Deal: Key Highlights

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