IFCI invokes promoter Kishore Biyani's stake in two Future companies

Biyani stake in group companies falls steadily

Delhi-based lender IFCI has invoked Future group promoter Kishore Biyani’s shares in Future Retail and Future Consumer after the companies failed to repay their loans to the lender.

IFCI requested the Future group to expedite repayment of loans, though it was part of the consortium of banks, which had agreed to a one-time restructuring (OTR) early this year. After the Future group could not make any repayment outside of the OTR, the lender invoked the shares and sold it in the markets, said a banking source. 

According to the filings made to the stock exchanges, post-invocation, the promoter’s stake in group flagship, FRL will fall to 19.44 per cent as compared to 19.86 per cent as on September-end. In Future Consumer, the promoter’s stake fell to 14.02 per cent after the IFCI invoked the shares. The promoters held 14.47 per cent stake in Future Consumer as on September-end.

A Future group spokesperson did not reply to an emailed questionnaire.

The promoter stake in other listed companies is also falling steadily. In Future Enterprises, the stake is down to 20.61 per cent and 17.33 per cent in Future Market Networks. In Future Lifestyle Fashions, the promoter now owns 20.39 per cent stake and 23.09 per cent in Future Supply Chain Solutions. The promoter’s stake in all group companies are consistently falling in the last two years.

The group is in the middle of a legal battle with American retail giant, Amazon over sale of its businesses to Reliance Retail  announced in August last year for a total enterprise valuation of Rs 24,700 crore. Amazon, which has 49 per cent stake in Future Coupon Ltd — a promoter entity of Future Retail — has objected to the RRL transactions saying the deal will breach its no-compete agreement with the Biyani family. The matter is pending in the Supreme Court and the Singapore International Arbitration Centre.

The group had started defaulting to loans in March last year as soon as the Covid pandemic hit the country. After the RBI came out with a debt restructuring package for Covid-hit companies in August last year, lenders to the group companies invoked an OTR with regard to credit facilities availed by the group companies on October 29, 2020. The OTR has been implemented after execution of the documents by the company and eligible lenders on April 26 this year.

According to the agreed terms of the OTR, the tenure of the debt was extended and overdue working capital limits was converted into working capital term loan and interest due till September, 2021 on various credit facilities was converted into Funded Interest Term Loan (FITL). The terms of repayment of the NCDs, which are not a part of the OTR, have also been separately extended on similar lines.