Future Retail board approves resolution plan to restructure financial debt

The board of Future Retail has approved a plan to restructure financial debt, said the company in a stock filing.

The restructuring would be according to the Reserve Bank of India’s circular for companies under stress due to the Coronavirus pandemic. Future Retail’s board meeting on April 17 decided the resolution plan will be submitted to the KV Kamath committee set up by the central bank to recommend parameters for one-time restructuring of corporate loans.

The company’s lenders approved the restructuring plan, which will restructure debt raised through non-convertible debentures.

"The COVID-19 pandemic has deeply impacted the long-term business viability and led to significant financial stress across the industries. The debt burden has become disproportionate relative to the cash flow generated by the Company,” said the company in its note to BSE and NSE.
 
The note listed 25 lenders, including State Bank of India and HDFC Bank.
 
The Future group, in August, announced to sell its retail and wholesale business in a Rs 24,713 crore deal to Reliance Retail Ventures Ltd (RRVL), the retail arm of billionaire Mukesh Ambani-led Reliance Industries Ltd.
 
The deal is contested by the e-Commerce major Amazon, which had invested in Future Coupons in August 2019 with an option of buying into the flagship Future Retail after a period of three to 10 years.
 
Amazon has challenged, the scheme of arrangement entails the consolidation of Future Group's retail and wholesale assets into one entity Future Enterprises Ltd and then transferring it to RRVL, at several forum including arbitration at Singapore International Arbitration Centre and before the Supreme Court of India.

(With inputs from PTI.)