Future Retail CoC rejects Space Mantra bid, NCLT extends insolvency period

The lenders of Future Retail Ltd have rejected the bid submitted by Space Mantra for the debt-ridden firm, which is currently going through Corporate Insolvency Resolution Process (CIRP).

The Resolution Plan submitted by Space Mantra for Future Retail Ltd (FRL), failed to get the required number of votes in the e-voting process of the Committee of creditors (CoC).

It was put "for the consideration of the CoC on July 19, 2023... and pursuant to the decision taken by CoC through e-voting, concluded on 30th September 2023 at 9 PM (IST), the resolution plan submitted by Space Mantra Private Limited has not been approved by CoC", FRL said in a regulatory filing on Monday.

It further added: "In view of the resolution plan not having been approved by the CoC, the next steps would be taken in accordance with the Insolvency & Bankruptcy Code 2016."

Space Mantra was the single bidder for FRL. According to some media reports, Space Mantra had offered around Rs 550 crore, which was very close to liquidation value. It was just 2.8 per cent of FRL's outstanding dues of Rs 19,773 crore to its financial creditors.

Moreover, in another filing FRL said that the National Company Law Tribunal (NCLT) has extended the deadline to complete the CIRP for 15 days, accepting the company's request.

"Consequently, the last date for completion of CIRP of FRL is September 30, 2023," it said.

This is the fourth extension granted by the Mumbai bench of FRL. Earlier, the deadline to complete CIRP of FRL was September 15, which was the third extension granted by the Mumbai bench of the National Company Law Tribunal (NCLT).

The insolvency proceedings against FRL were started by the tribunal on July 20, 2022.

The Insolvency & Bankruptcy Code (IBC) mandates the completion of CIRP within 330 days, which includes time taken during litigations.

Last week, Kishore Biyani, the erstwhile promoter of debt-ridden Future Retail, has moved the Bombay High Court against the forensic audit process of the company.

In August this year, Kishore Biyani and his brother Rakesh Biyani were asked by the Bank of India to respond to findings made in the forensic audit report by BDO, a forensic auditor appointed by the leading financial creditor of FRL.

The forensic auditor had submitted its report on August 9, 2023 and Bank of India sought representation/submissions from the company over the credit facilities availed by Biyani, which was replied by the resolution professional on August 28, 2023, FRL had said in a regulatory filing.