FRL launches SC challenge against own lenders to avoid a defaulter tag

Earlier this month, Future Retail had said it had missed the due date for the payment of Rs 3,494.56 cr to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon

Kishore Biyani-led Future Retail Ltd (FRL) on Tuesday moved the Supreme Court requesting it to pass a direction to restrain its lenders from declaring the company as a non-performing asset (NPA) in case of a default of Rs 3,494.56 crore.

Earlier this month, Future Retail had said it had missed the due date for the payment of Rs 3,494.56 crore to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon, impacting its monetisation plans. It has till the end of this month to make the payment.

Moving an urgent petition on Tuesday, FRL has requested the apex court to issue a "direction restraining Respondent Nos.2-28 (lenders) from declaring the Petitioner No 1 (FRL) as a Non-Performing Asset."

The Future group firm has also asked for some more time for loan payment and requested the Supreme Court to "extend the timeline stipulated under the Framework Agreement for monetization of the Small Format Stores in line with the minutes of the meeting dated 01.01.2022."

After it missed the due date (December 31, 2021), FRL got a review period of 30 days (from the due date) in terms of the RBI circular dated August 6, 2020, on one-time restructuring (OTR) scheme for COVID-19 hit companies.

FRL had, last year, entered into an OTR scheme for COVID-19 hit companies with a consortium of banks and lenders and was to discharge "an aggregate amount of Rs 3,494.56 crore" on or before December 31, 2021 for that.

In its petition, FRL has also requested the Apex Court to issue an order or direction to its lenders "to extend the "cure period"/ "review period" of 30 days under the Framework Agreement" and relax the time frame.

In August 2020, the Future group had announced a Rs 24,713-crore deal for sale of the retail and wholesale business, and the logistics and warehousing business to Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd.

However, e-commerce major Amazon is contesting the deal through its 49 per cent stake in Future Coupons Pvt Ltd (FCPL), which is a shareholder in Future Retail.

The matter is presently in dispute before the Supreme Court and Singapore International Arbitration Centre (SIAC).

Reliance Retail Ventures, has for the second time - extended the timeline for completing its Rs 24,713-crore deal with Future group to March 31, 2022 as it still awaits regulatory and judicial clearances.