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Amazon's offer legally invalid, can't accept: FRL independent directors

Independent directors of Future Retail have turned down Amazon's offer of financial support to the company through a deal with private equity firm Samara Capital

Amazon | Future Group Future Retail | Samara Capital

Press Trust of India  |  New Delhi 

Amazon and JPMorgan first issued a card together in 2002 and their offerings have long operated on the Visa Inc. network.

Independent directors of Future Retail have turned down Amazon’s offer of financial support to the company through a deal with private equity firm Samara Capital, saying any legally invalid offer cannot be accepted.

Future Retail’s independent directors had last week asked if it was willing to give a long-term loan to avoid default on repayment of Rs 3,500 crore loan due on January 29. replied to that saying it was willing to financially assist Future Retail through the deal but the retailer must shelve Rs 24,713 crore deal with the Reliance group.

Independent directors say hasn’t shown them the money that Future Retail urgently needs to stall being declared a defaulter. They want to know if Amazon can act on behalf of and has the authority to negotiate and finalise such a transaction on its behalf.

Speaking to PTI, Ravindra Dhariwal, an independent director of Future Retail Ltd (FRL) said if Amazon wants to help FRL, it needs to show the structure through which it will put the money.

We cannot accept the offer until and unless it is legally valid and unless it comes in time. What is the point of giving an offer after chidiya chug gayi khet... If you want to help, then show us the structure through which you will put the money and we have asked you in good faith to put in Rs 3,500 crore now so that we can repay the bank and the company is not treated as NPA and is not liable to IBC, he said.

Amazon told FRL that remains interested in buying out the debt-strapped retailer's businesses such as Big Bazaar for Rs 7,000 crore, and had asked FRL to provide its financial details to Samara Capital for the private equity fund to conduct expedited due diligence.

Dhariwal expressed concern that the support being extended is more of publicity.

They just do not have a tenable structure, neither do they have a viable structure. The issue is very simple. We owe money to the banks, bondholders and vendors, he said.

Asked if Samara has directly reached out to the independent directors, Dhariwal answered in the negative. We, the independent directors, have never heard about Samara. We have no idea why they are interested, why they want to do it. We, independent directors, have never talked to Samara.

Samara has discussed the terms sheet with the promoters of Big Bazaar with Biyani brother and they have acknowledged the term sheet, but not supported the term sheets. It is one of the 2-3 term sheets which they (FRL) have got. They never discussed it with us and never made it to the Board because they (Biyanis) found it inadequate, he said.

Samara Capital had, in June 2020, signed a non-binding term sheet to acquire FRL’s businesses including Big Bazaar, Easyday and Heritage among other chains for Rs 7,000 crore.

While Amazon is opposed to billionaire Mukesh Ambani’s group acquiring businesses of FRL along with other group for Rs 24,713 crore, it seemed from the letter that it was open to Samara Capital taking over the business.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Mon, January 24 2022. 23:23 IST