The National Company Law Tribunal (NCLT) on Monday allowed Reliance Retail Ventures Ltd (RRVL) and Reliance Retail & Fashion Lifestyles Ltd (RRFLL) to hold extraordinary general meetings (EGMs) of their shareholders and creditors to acquire Future Group’s businesses.
On September 28, the NCLT had allowed six Future Group companies to hold meetings of their respective shareholders and creditors. Lawyers said the NCLT permission to hold the meeting was a preparatory step. The Supreme Court will take the final decision.
“I do not see any major departure from the orders in the proceedings inter se Amazon and Future Retail,” said Sameer Jain, managing partner, PSL Advocates & Solicitors, a Delhi-based law firm.
In August last year, RRVL, a subsidiary of Reliance Industries, announced it was acquiring the retail, wholesale, logistics and warehousing businesses, including debt, from Future Group for Rs 24,713 crore.
According to the regulations, all mergers and acquisitions require the court’s approval and hence both Reliance companies had approached the NCLT for its clearance.
The NCLT’s final clearance of the deal will be subject to the Supreme Court’s order, where both Future Retail, a Future Group company, and Amazon are litigating.
After Reliance Retail and Future Group announced their transaction in August last year, Amazon, which holds 49 per cent in a holding company of Future Retail, objected to the deal, saying the transaction breached its non-compete agreement with the Future Group promoters.
Amazon later moved the Singapore International Arbitration Centre (SIAC), which, in an interim order, restrained the transaction.
Future Retail later moved the Delhi High Court, which held there was no arbitration agreement between Amazon and the company. Amazon moved the division bench of the Delhi High Court, which ordered a status quo. The matter is pending in the Supreme Court, which has asked both parties to wait for the final order from the SIAC.
According to the plan, various Future Group companies -- Future Retail, Future Consumers, Future Supply Chain Solutions, Future Lifestyle Fashion, Future Brands, and Future Market Network -- will first merge into Future Enterprises.
Subsequently, the retail and wholesale undertaking will be transferred to RRVL and RRFLL, a wholly-owned subsidiary of RRVL. At the same time, the logistics and warehousing undertaking will be transferred to RRVL. Future Enterprises will have left with a few businesses, including two insurance joint ventures.
The retail and wholesale business includes Big Bazaar, fbb, Foodhall, Easyday, Nilgiris, and Central and Brand Factory chains.