Tag: Future Retail

Future Retail’s resolution professional files for liquidation before NCLT

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Future Retail’s Resolution Professional has filed for initiation of liquidation of the company. In a stock exchange filing late on Friday night, the company said that the RP has filed the application before the National Company Law Tribunal under Section 33 of the Insolvency and Bankruptcy Code, 2016 on November 9, 2023.

It added in the filing that the Committee of Creditors (CoC) of Future Retail have not approved the resolution plan submitted by Space Mantra Private.

The company had disclosed on October 1 that the resolution plan submitted by Space Mantra Private Limited was put to vote for the consideration of the CoC, but was rejected as it did not get the required number of votes through e-voting.

“In view of the resolution plan not having been approved by the CoC, the next steps would be taken in accordance with the Insolvency & Bankruptcy Code 2016,” the stock exchange disclosure noted on October 1.

An online construction & design platform, Space Mantra emerged as the single highest bidder for debt-ridden Future Retail among six companies that placed their bids including Pinnacle Air, Lehar Solutions, Goodwill Furniture, among others.

According to a Business Standard report from July, Space Mantra made an offer of ₹550 crore for Future Retail as against admitted claims by lenders of ₹19,400 crore, offering less than 3% in recovery. As per the report, lenders at the time had asked Space Mantra to ‘sweeten’ the deal further to avoid the massive 97% haircut.

This too, came after the RP for Future Retail didn’t receive any serious suitors for the company despite multiple attempts. While 49 companies put in expressions of interest for the company, a binding offer was made by only six companies, which mainly included scrap dealers.

Insolvency proceedings were initiated against Future Retail by State Bank of india, which filed for this last year in April for non payment of dues, the company was then admitted into debt resolution under IBC in October 2022.

Kishore Biyani-led Future Retail, which ran formats like Big Bazaar, FBB, Central, among others, was struggling with mounting debts, exacerbated by the pandemic, which led to the closure of most of its stores. As the company struggled to stay afloat, it decided to sell its retail, wholesale and logistics assets to Reliance Industries in a Rs 24,700 crore deal in August 2020. However, following several legal roadblocks, the deal fell through in April 2022, after lenders rejected the deal.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Amazon vs CCI: Supreme Court grants further relief to e-commerce giant, penalty recovery on hold till Sept 20

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a relief to Amazon, the Supreme Court has extended interim relief to the e-commerce giant and ordered that no recovery proceedings ordered by the Competition Commission of India (CCI) shall be initiated until the next date of hearing i.e. September 20.

The top court’s direction comes on Amazon’s plea challenging the CCI’s 2021 order that imposed a penalty of Rs 202 crore on the e-commerce giant for not disclosing its interest in Future Retail while investing in Future Coupons.

The order directed Amazon to pay the penalty amount by mid-February 2022. The penalties were imposed in two parts in accordance with separate sections of the law. Rs 200 crore and Rs 2 crore were thus imposed on Amazon.

Amazon filed the petition with the Supreme Court after the National Company Law Appellate Tribunal (NCLAT) backed the antitrust body’s decision to defer its approval of Amazon’s deal with the Future Group.

Earlier in May this year, the Supreme Court stayed the CCI order suspending approval for the e-commerce giant’s 2019 deal investment in Future group and also the recovery of the penalty.

In December 2021, CCI suspended Amazon’s 49 percent share acquisition clearance in Future Coupons Pvt Ltd (FCPL), the promoter of the Future Group.

Amazon was fined Rs 200 crore by the anti-trust tribunal for failing to disclose relevant and crucial information on its 2019 investment arrangement with FCPL.

The company, however, claimed that it made all required disclosures and committed no violation. The e-commerce giant had challenged the NCLAT verdict in the country’s top court.

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Amazon had opposed Future Retail’s deal to sell assets to Reliance Retail based on its 2019 acquisition of FCPL stake. The Rs 24,713-crore Future Retail and Reliance Retail deal was eventually called off in April.

The Future Group and Amazon have been at loggerheads in courts since October 2020. It started when Singapore’s Emergency Arbitrator ordered FRL which restrained it from going ahead with its deal with Reliance Retail.

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Only 6 companies bids for Future Retail, big ones such as Reliance and Adani opt-out

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The lenders of debt-ridden Future Retail Ltd (FRL) have received six bids from prospective buyers by May 15, which was the last date for the submission of resolution plans.

The company is “in receipt of resolution plans/bids from 6 prospective resolution applicants in response to the Request for Resolution Plans” said the regulatory filing by FRL without disclosing the names.

According to the media reports, major corporate houses such as Reliance Retail, Jindal Power Ltd and Adani Group had not filed their bids despite being selected in the final list of 48 companies.

The deadline for submission of resolution plans was May 15, 2023, for 48 companies, which were in the final list of ‘Eligible Prospective Resolution Applicants’.

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This has happened despite FRL lenders coming with revised Expressions of Interest (EoIs) and inviting fresh bids after dividing its assets into clusters.

Future Retail has a debt of around Rs 30,000 crore and the company is going through Corporate Insolvency Resolution Process (CIRP).

“The aforesaid submissions were opened in the meeting of the Committee of Creditors of the Corporate Debtor held on May 16, 2023, in the presence of the prospective resolution applicants,” it said.

Earlier on April 24, FRL creditors had come out with a final list of 48 companies, including Reliance Retail, Jindal Power Ltd and Adani Group, which were in the final list of eligible prospective resolution applicants for acquiring the company.

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Some of the other players who had submitted EoIs include WHSmith Travel Ltd, Sahara Enterprises, Century Copper Corp, Greentech worldwide, Harsha Vardhan Reddy, J C Flowers Asset Reconstruction Pvt Ltd, Pinnacle Air Pvt Ltd and Universal Associates.

This time Committee of Creditors had provided two options – In the first option, companies could bid for the acquisition of FRL as a whole and Under the second option, FRL’s business has been distributed into five clusters and were given liberty to pick any one or in combination.

Last month the Mumbai-based NCLT bench had granted FRL an extension of 90 days till July 15, 2023, for concluding the CIRP.

On March 23, 2023, creditors of FRL invited new EoIs whereby prospective buyers can bid for the debt-ridden firm “as a going concern or individual cluster or a combination of clusters of its assets”, as it failed to attract a resolution plan in more than four months.

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Earlier, it had received EoIs and finalised 11 prospective bidders, including Reliance and April Moon Retail, but could not get a resolution plan despite two extensions in the deadline for submissions.

FRL operated multiple retail formats in both the hypermarket supermarket and home segments under brands such as Big Bazaar, Easyday, and Foodhall. At its peak, FRL was operating more than 1,500 outlets in nearly 430 cities.

Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Future Retail’s creditors seek 90 days extension for concluding insolvency resolution process

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Lenders of debt-ridden Future Retail Ltd (FRL) has sought an extension of 90 days for concluding the Corporate Insolvency Resolution Process (CIRP) of the company.

The resolution professional of FRL has filed an application before the Mumbai bench of the National Company Law Tribunal (NCLT) “seeking exclusion of a period of 90 days from CIRP of FRL, and consequent extension from April 16, 2023, to July 15, 2023, for concluding the CIRP of FRL.” The CIRP was initiated against FRL by NCLT on July 20, 2022, following loan default.

The Insolvency and Bankruptcy Code (IBC) time frame for resolution is 330 days, inclusive of the time taken for litigation.

As per Section 12(1) of the Code, the CIRP shall be completed within a period of 180 days from the date of initiation. However, NCLT may grant a one-time extension of 90 days. The maximum time within which CIRP must be mandatorily completed, including any extension or litigation period, is 330 days.

Also Read: Future Retail Sale | 49 entities including Reliance Retail, Adani JV submit expression of interest

Besides, the resolution professional has also filed an application before the Mumbai bench of the NCLT, seeking directions with respect to gaining access to the inaccessible stores and warehouses of FRL, the company said in a regulatory filing.

In February 2022, Reliance Retail has taken over 200 Future Group stores and had re-branded as Reliance stores, accordingly after the Kishore Biyani-led group failed to make lease payments to the landlords.

Reliance Retail, the retail arm of the oil-to-telecom conglomerate, had in August 2020 agreed to take over the retail and logistics business of the Future Group for Rs 24,713 crore but the deal couldn’t be closed as Future’s warring partner Amazon went to courts citing violation of some contracts.

Last week, lenders had informed that they have received Expression of Interest (EoI) from 49 players, including Reliance Retail, Jindal Power Ltd and Adani group for acquiring the assets of FRL.

On March 23, 2023, FRL’s lender had invited new expressions of interest where prospective buyers can bid for the debt-ridden firm “as a going concern or individual cluster or a combination of clusters of its assets”, as it failed to attract a resolution plan in over four months.

Earlier, it had received EoI and finalised 11 prospective bidders, including Reliance and April Moon Retail, but could not get a resolution plan despite two extensions in the deadline for submissions.

The Committee of Creditors had provided two options in the EoI, for which the last date for submission was April 7, 2023.

In the first option, the Prospective Resolution Applicant (PRA) could bid for the acquisition of Future Retail as a whole, including its shareholding interest in its subsidiaries. While under the second option, Future Retail’s business has been distributed in five clusters diving business, in which PRAs can bid for “any individual cluster or any combination of clusters.”

As per the invitation, FRL currently has access to 302 leased retail stores spread across 23 states and union territories, consisting of 30 large format stores such as Big Bazaar and FBB stores and 272 small format stores.

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Future Retail Sale | 49 entities including Reliance Retail, Adani JV submit expression of interest

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Future Retail on April 8 had released a list of 49 entities that submitted expressions of interest (EoI) for the bankrupt company.

According to the list, prospective bidders include Reliance Retail, Jindal Power, April Moon Retail and JC Flowers. April Moon Retail is a joint venture between Adani Airport Holdings and the Flamingo Group.

This is the second round of EoIs that have been invited. In November 2022, about 13 EoIs were received and at the time too April Moon Retail, Reliance Retail had submitted their bids. However despite being shortlisted, the resolution plans were not submitted by any of the players despite the deadline being extended twice.

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Future Retail entered insolvency proceedings in July 2022 and, as of March 2023, creditors have claimed dues worth about Rs 21,555 crore — of these about Rs 19,183 crore have been admitted.

The final list of the prospective applications will be released on April 13, following which the deadline for submitting the resolution plans will be May 15.

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Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Future Retail hits upper circuit after Kishore Biyani withdraws resignation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of debt-ridden Future Retail surged five percent for the second day in a row to hit the upper circuit on Thursday after the company said that Kishore Biyani has withdrawn his resignation from the post of executive chairman and director.

Future Retail (FRL), which is going through the insolvency resolution process, in an exchange filing stated that Kishore Biyani has withdrawn his resignation by way of his letter dated March 10, 2023.

The Resolution Professional of FRL had raised objections to the contents of Biyani’s resignation letter and had requested him to recall it.

The Resolution Professional (RP) last week filed a plea before the National Company Law Tribunal against former and present directors of FRL. The Resolution Professional quantified the potential loss that has been caused to the creditors of FRL to be Rs 14,809.44 crore, and sought a direction against present and former FRL directors to contribute such amount to the company.

The stock went on a spiral and touched 52-week low levels on Monday and Tuesday. FRL operated multiple retail formats under brands such as Big Bazaar, Easyday, and Foodhall. FRL was operating over 1,500 outlets in nearly 430 cities.

The company was dragged into insolvency proceedings by Bank of India after FRL defaulted on loans. FRL shares were trading 4.65 percent higher at Rs 2.70 apiece on BSE at 12:35 pm.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Kishore Biyani steps down as chairman of Future Retail

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Kishore Biyani has stepped down from the suspended board of Future Retail and has resigned as chairman and director of the company, which is currently facing insolvency proceedings before the NCLT.

In his emotional farewell, Biyani, who was associated with Future Retail Ltd (FRL) since 2007 when it was incorporated, said it was facing CIRP (Corporate Insolvency Resolution Process) as a “result of the unfortunate business situation”.

“While the company was always my passion and I have done everything in my power for its growth, I have to accept reality and move on,” said Biyani in his resignation letter to the resolution professional of the company.

The letter, a copy of which was shared with the stock exchanges, said: “As I understand, I have completed all the required handholding within my capacity for you to take over the entire control of the company and its assets and I have also completed the handover of whatever information and data, which was available with the earlier management or which could be retrieved from ex-employees or third parties and have shared with you all the insight about the business and operations and various hurdles faced by the earlier management.”

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FRL, in a regulatory filing, informed that Biyani has “tendered a letter of his resignation from the position of the “Executive Chairman and Director” of the company.   His resignation “shall be placed before the Committee of Creditors, as per the Insolvency and Bankruptcy Code, 2016”, the company added.

The resolution professional of Future Retail Ltd (FRL) has received intimation through an e-mail on January 24, 2023.

Biyani, who was also known as a retail tsar in India, is known as the pioneer of modern retail in India, who took the modern brick & mortar format among the masses.   FRL operated multiple retail formats in both the hypermarket supermarket and home segments under brands such as Big Bazaar, Easyday, Foodhall. At its peak, FRL was operating over 1,500 outlets in nearly 430 cities.

Biyani (61) has also assured to cooperate with the lenders.

“Needless to say, that in spite of my resignation, I would be available for all possible help, which can be done by me with my limited resources and ability to resolve any issue related to the company,” he said.

FRL was dragged into insolvency proceedings by its lender Bank of India after it defaulted on loans.

The Mumbai bench of the National Company Law Tribunal had on July 2022 directed to initiate insolvency against FRL.

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It was part of the 19 Future group companies operating in the retail, wholesale, logistic and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713-crore deal announced in August 2020.

However, lenders had rejected the takeover of the 19 Future group companies, including FRL, by Reliance amid a legal challenge by Amazon.

As many as 13 companies including Reliance Retail, Adani Group’s JV April Moon Retail and 11 other companies have made it to the final list of prospective bidders for acquiring FRL.

Last year in August, stock market regulator Sebi had ordered a forensic audit of the accounts of FRL for the financial years 2019-20, 2020-21 and 2021-22.

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The Securities and Exchange Board of India (Sebi) has also asked for an audit of FRL’s Related Party Transactions (RPT) with three other Future group firms — Future Enterprises Ltd, Future Consumer Ltd and Future Supply Chain Solutions Ltd.

RPT refers to a deal or arrangement made between two parties related to each other by having a pre-existing business relation or common interest.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Singapore Arbitral Tribunal rejects Future Group’s proposal to scrap arbitration proceedings against Amazon

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a setback for the Future Group, the Singapore Arbitral Tribunal has rejected its plea to scrap arbitration proceedings against Amazon. The tribunal has allowed the arbitration to continue and will hear Amazon’s plea against Future Group where the former is likely to press for damages.

The Future Group had sought termination of the arbitration proceedings by citing the Competition Commission of India (CCI) order that suspended approval for Amazon’s investment.

Also Read | Amazon vs Future Retail: A timeline of how events unfolded

In December 2021, the CCI had suspended approval for Amazon’s investment in Future citing a lack of full disclosure. The National Company Law Appellate Tribunal (NCLAT) on Monday upheld the December CCI order suspending Amazon’s 49 percent stake in Future Coupons Pvt Ltd (FCPL), the promoter of the Future Group.

Amazon had argued that Future Retail Limited (FRL) did not honour the Singapore Emergency Arbitrator’s award of October 2020 and that the lenders could not have entered into a framework agreement with FRL in breach of the award. The e-retailer had moved the Emergency Arbitrator in Singapore for alleged breach of contract by FRL.

People in the know have told CNBC-TV18 that the Future Group is likely to challenge this order by the Singapore tribunal and may move to the Delhi High Court in this regard.

FRL has defaulted on a payment of Rs 5,322.32 crore to its lenders amid the ongoing litigations with Amazon and other related issues. Future Group’s proposed deal with Reliance, which was opposed by Amazon, also fell through. In March, the Bank of India through a public notice claimed its charge over the assets of FRL and warned the public against dealing with assets of the Kishore Biyani-led Future Group firm.

The secured lenders of Future Retail voted nearly 70:30 against Future Group’s Rs 24,713 crore deal to transfer its retail, wholesale, logistics and warehouse assets to Reliance Retail Ventures Limited (RRVL).

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow