Reliance calls off deal with Future after secured creditors reject it

A majority of the secured creditors voted against the resolution.

Reliance Industries on Saturday told BSE its agreement to buy Future Retail for almost Rs 25,000 crore cannot be implemented after lenders to the retail company rejected the deal.

Reliance said in a regulatory filing Future Group companies comprising Future Retail Limited (FRL) and other listed companies involved in the scheme have intimated the results of the voting on the scheme of arrangement by their shareholders and creditors at their respective meetings.

Majority shareholders and unsecured creditors of Future Retail, Future Lifestyle Fashions, and other group firms have voted in favour of the scheme of amalgamation with Reliance Retail, the company said on Friday.

However, a majority of the secured creditors of four out of the five Future companies (for which voting results are announced) voted against the resolution required to pass Future Group’s Rs 25,000-crore scheme to sell most of its retail and logistics businesses to Reliance Group.

In Future Lifestyle Fashions, 81.91 per cent of the shareholders voted in favour of the scheme of amalgamation, and so did 93.93 per cent of the unsecured creditors.

Shareholders of the six listed Future Group companies voted on Wednesday. Bankers said all the large lenders had rejected the proposal.

Lenders rejected the slump sale of Kishore Biyani’s Future Group to Reliance Retail, multiple sources told Business Standard on Friday, after e-voting was conducted on Thursday, citing “uncertainty over the entire proposition” for rejecting the proposal.

After the lenders’ rejection, the only option for the resolution of Kishore Biyani’s retail chain is going to bankruptcy court.
 

“...the secured creditors of FRL have voted against the scheme. In view thereof, the subject scheme of arrangement cannot be implemented,” said Reliance in the exchange filing.