Future Retail defaults on foreign bond coupon payment, faces S&P downgrade

Cites liquidity pressure, depressed operating cash flow, delays in disbursement of credit lines from banks

Future Retail defaulted on its interest payments on Wednesday leading to S&P Global Ratings warning that it would downgrade the retail firm to default category after 30 days because the company faced liquidity pressure, depressed operating cash flow and delays in disbursement of credit lines from banks.

This comes at a time when Reliance Industries is in talks to acquire majority stake in Future Retail, after the company’s lenders approached the Ambani-controlled company for an acquisition. 

S&P said Future Retail failed to make a coupon payment of about Rs 100 crore for its $500-million senior secured notes due on Wednesday.