To go through, the proposed deal required 75% of Future’s flagship company Future Retail’s (FRL) secured lenders to vote for the scheme. But around 69% voted against it, FRL said in a regulatory filing on Friday.
Bank of India, State Bank of India, Bank of Baroda and Axis Bank are among the top lenders for Mumbai-based FRL, which may be staring at bankruptcy proceedings after Friday’s developments.
A senior banker said that they had no choice but to reject the proposal as Reliance group had not made any commitments and Biyani, once hailed as the king of retail, did not appear to have any backing for the scheme he had put up.
A majority of the debt-laden FRL’s shareholders (86%) and unsecured creditors (78%), however, voted in favour of the scheme, showed FRL’s filing, which prompted sources to say that it may not be the end of the road for Reliance, which may explore legal options to complete a full takeover of Future’s assets.
While a FRL spokesperson did not comment on this story, a questionnaire emailed to Reliance Retail did not elicit a response at the time of this article going to print.
While FRL and US e-tailer Amazon, which has been trying to block the former’s sale of assets to Reliance, have been entangled in a lengthy litigation process, Reliance moved in the last week of February to take control of around 800-900 stores of FRL over non-payment of rentals.
The telecom-to-petroleum conglomerate had earlier sublet these premises to a cash-strapped FRL, which was deeply impacted during the pandemic and defaulted several times over its loan payments. FRL and Future Enterprises (FEL) failed to pay Rs 8,158 crore in loan repayments that was due March 31, 2022 leading Bank of India to initiate bankruptcy proceedings against FRL.
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