Ril Extends Deadline By 6 Months To Complete Rs 24,713 Cr Deal With Future Group

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Ril Extends Deadline By 6 Months To Complete Rs 24,713 Cr Deal With Future Group
24 Jan 2023
5 min read

News Synopsis

Latest Updated on 24 January 2023

Reliance Industries Ltd. announced on Saturday that the transaction cannot proceed because secured creditors of the latter have voted against it, nearly 21 months after the two or more parties signed an agreement for a Rs 24,713-crore deal to buy the Retail, Wholesale, Logistics, and warehousing assets of the Kishore Biyani, led Future Group.

According to a regulatory filing made by Reliance the Future Group companies which include Future Retail Limited and other listed companies involved in the scheme have informed their respective shareholders and creditors of the result of the vote on the scheme of arrangement that took place at their respective meetings.

The plan was rejected by the secured creditors of FRL. The scheme of arrangement for the transfer of Future Group's retail and Wholesale Business as well as its logistics and warehousing business to its subsidiaries Reliance Retail Ventures Ltd and Reliance Retail and Fashion Lifestyle Ltd. was updated by RIL who stated that due to this the subject scheme of arrangement could not be implemented.

To seek permission for the plan of merger and asset sale in line with the deal announced with Reliance Retail, the Future Group companies this week held meetings of their shareholders and secured and unsecured creditors.

Secured creditors of the listed companies Future Retail, Future Enterprises, Future Lifestyle Fashion Ltd, Future Market Networks, and Future Consumer mostly banks and financial institutions were unable to get the necessary 75 percent approval.

The merger with Reliance was supported by the owners of the listed companies. E-commerce giant Amazon which is 2019 bought a 49 percent share in Future Coupons Pvt Ltd the promoter company of FRL opposed the meetings.

Future Group announced the Rs 24,713-crore sale of 19 companies involved in the retail, wholesale, logistics, and warehousing sectors to Reliance Retail Ventures Ltd. in August 2020. All of the retail businesses that are part of the RIL Group are held together with RRVL.

Global e-commerce leader Amazon strongly opposed the deal, saying it violated their 2019 agreement under which they bought a 49 percent ownership in FCPL, the promoter company of FRL, for around Rs 1,500 crore. Future Group, Reliance Retail, and e-commerce giant Amazon, which is opposed to the deal did not immediately respond to a request for comment on the development.

Following FRL's failure to fulfill landlord lease payments in February, Reliance Retail took over the management of at least 350 FRL stores and provided jobs to its staff.

When Amazon brought FRL and the promoters to the Singapore International Arbitration Center the EA issued an interim decision in Amazon's favor in October 2020. It had barred FRL from taking any action to Sell, Encumber, or issue securities to receive any funds from a restricted party.

Last Updated on 02 October 2021

The long-delayed completion date for Reliance Industries' 24.713 crore contract with Future Group has been extended by 6 months until March 32 of next year. RRVL stated last year that it had acquired Future Group's retail operations in the fashion, lifestyle, and grocery divisions in exchange for some of the most well-known retail brands. Future Group was selling a substantial piece of its retail operation to Reliance without their authorization. Amazon invested in Future Coupons, which is a shareholder in Future Retail Ltd. In October, the Emergency Arbitrator delivered an interim award in favor of the US e-commerce behemoth.