Future Retail defaults on Rs 5,322 crore debt repayment

NEW DELHI: Future Retail (FRL), the parent company of Big Bazaar, said on Friday it had missed the due date for the repayment of around Rs 5,322 crore to lenders due to the ongoing legal battle with US online retailer Amazon, among other issues.
In 2021, the FRL led by Kishore Biyani had entered into a one-time restructuring program (OTR) for companies affected by the pandemic, with a consortium of banks and was under an obligation to raise Rs 3,900 crore by March 31, 2022 through Equity Contribution.
“Furthermore, considering the capital injection, the company was required to pay a total amount of Rs 5,322.32 crore to various banks and lenders in the consortium (who are parties to the deal under the OTR scheme) no later than March 31, 2022 (‘deadline’),” FRL said in a regulatory filing on Friday.
Citing breach of contract, Amazon attempted to block a proposed Rs 24,700 crore deal between Future Group and Reliance for Future’s sale of retail and logistics assets to the latter. Last month, however, Reliance moved in to take over the majority of FRL’s stores, citing non-payment of rent.
The development closely follows a wave of high profile departures from the Future Group, including FRL CEO Sadashiv Nayak and company director Rahul Garg.
Stating that it was in discussions with the lenders on this matter, FRL said that “the company will advise further developments and updates in this regard as appropriate.”
The Future Group company had missed an earlier deadline of December 31, 2021 for payment of Rs 3,494.56 crore to banks.
FRL operates various retail formats across India including Big Bazaar, Koryo, Foodhall and Easyday and is among 19 Future Group companies expected to become part of Reliance Retail under the deal announced in August 2020 .

Tana T. Thorsen