India’s Future Retail lenders call for its assets to be auctioned

People walk out of the Big Bazaar retail store in Mumbai, India November 25, 2020. REUTERS/Niharika Kulkarni

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NEW DELHI, Feb 3 (Reuters) – Lenders to Future Retail (FRTL.NS), the company disputed by Reliance Industries (RELI.NS) and Inc, has told India’s Supreme Court that its assets should be put in up for auction after missing payments.

They also said they had started classifying loans to the country’s second-largest retailer as non-performing and would need to make combined provisions of 80-90 billion rupees ($1.1 billion-1.2 billion). dollars) due to non-payment.

“Let it be subject to an open offer… That’s the only solution,” Rakesh Dwivedi, a lawyer acting for some 30 Future lenders, told the Supreme Court justices, citing the prolonged litigation until now between Future and Amazon.

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Dwivedi added that Future’s two suitors – Amazon and Reliance – could then bid for the retailer’s assets.

The court did not issue a decision on Thursday and said it would hear the case again in due course. Future declined to comment.

Future failed to complete a planned $3.4 billion sale of its retail assets to Reliance after business partner Amazon successfully argued in arbitration and in court that the Indian technology giant retailer had breached certain contractual non-competition terms.

Future has denied any wrongdoing.

Amazon is keen to own a portion of Future whenever Indian investment regulations allow it, but said its plans would be ruined if Future were allowed to sell its assets.

Future said it was unable to pay the 35 billion rupees ($470 million) it owed lenders on December 31 because it could not sell some small stores due to the dispute with Amazon. He had hoped to use a 30-day grace period to resolve the situation, but was unable to do so.

Last month, Future filed a lawsuit against its lenders to stop them from going into insolvency proceedings, hoping to buy more time to make payments and avoid having its loans designated as non-performing, which gives banks more control over its finances.

Future, which has seen its business hit hard by the pandemic, has 1,700 outlets including some 900 small stores, the rest being large-format hypermarkets and fashion stores.

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Reporting by Aditya Kalra and Abhirup Roy; Editing by Edwina Gibbs

Our standards: The Thomson Reuters Trust Principles.

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