NEW DELHI: Reliance Industries (RIL) said on Saturday that it has called off the proposed deal to acquire Future Retail’s (FRL) assets for Rs 24,700 crore.
At meetings of shareholders and creditors of Future Group companies comprising FRL and other listed entities involved in the scheme held on April 20 and 21, the companies intimated the results of the voting.
“As per these results, the shareholders and unsecured creditors of FRL have voted in favour of the scheme but the secured creditors of FRL have voted against the scheme. In view thereof, the subject scheme of arrangement cannot be implemented,” said RIL in a regulatory filing.
A senior banker, however, said lenders were forced to vote against the proposal as RIL had not made any commitments and Future Group promoter Kishore Biyani appeared to lack support for the scheme the retailer had put up.
While the development may result in a cash-strapped FRL facing bankruptcy proceedings, a majority of its stores and employees are currently with RIL. In late February, RIL had moved in to take control of around 900 stores of FRL as the latter failed to pay rentals.
The conglomerate had earlier sublet these premises to FRL, which was deeply impacted by lockdowns brought about by the pandemic and defaulted on its loan repayments. TOI was the first to report about the store takeovers in its February 26 edition.
Future Enterprises (FEL) and FRL, which has been entangled in a bitter legal battle with US e-tailer Amazon over its proposed assets sale to RIL, failed to pay Rs 8,158 crore in loan repayments that were due on March 31, leading one its biggest lenders Bank of India (BOI) to initiate bankruptcy proceedings against it.
FRL had cited its litigation with Amazon as one of the major reasons for its failing to pay its dues. After the proposed Future-Reliance deal was announced nearly two years ago, Amazon had dragged FRL to a Singapore-based emergency arbitrator over alleged breach of contract.
At meetings of shareholders and creditors of Future Group companies comprising FRL and other listed entities involved in the scheme held on April 20 and 21, the companies intimated the results of the voting.
“As per these results, the shareholders and unsecured creditors of FRL have voted in favour of the scheme but the secured creditors of FRL have voted against the scheme. In view thereof, the subject scheme of arrangement cannot be implemented,” said RIL in a regulatory filing.
A senior banker, however, said lenders were forced to vote against the proposal as RIL had not made any commitments and Future Group promoter Kishore Biyani appeared to lack support for the scheme the retailer had put up.
While the development may result in a cash-strapped FRL facing bankruptcy proceedings, a majority of its stores and employees are currently with RIL. In late February, RIL had moved in to take control of around 900 stores of FRL as the latter failed to pay rentals.
The conglomerate had earlier sublet these premises to FRL, which was deeply impacted by lockdowns brought about by the pandemic and defaulted on its loan repayments. TOI was the first to report about the store takeovers in its February 26 edition.
Future Enterprises (FEL) and FRL, which has been entangled in a bitter legal battle with US e-tailer Amazon over its proposed assets sale to RIL, failed to pay Rs 8,158 crore in loan repayments that were due on March 31, leading one its biggest lenders Bank of India (BOI) to initiate bankruptcy proceedings against it.
FRL had cited its litigation with Amazon as one of the major reasons for its failing to pay its dues. After the proposed Future-Reliance deal was announced nearly two years ago, Amazon had dragged FRL to a Singapore-based emergency arbitrator over alleged breach of contract.
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