Future Retail asks Reliance to return assets and inventory

Future Retail wrote a letter to Reliance Industries asking it to return the assets and inventory of the stores it had recently taken over. Reliance had taken over more than 900 out of 1,500 stores last month after Future Retail failed to pay the lease amount.

According to a senior executive at Future Retail, “The lenders have the first charge on the assets, and the inventory is perishable, therefore Future Group management has asked Reliance to hand over the assets and inventory of the stores that were operated by Future The grand retail bazaar.

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After the abrupt takeover of store ownership in the last week of February, Future Retail said these stores contributed more than 50% of the company’s revenue. On the other hand, the lenders had also issued a public notice advising that they held a “security interest” over movable fixed assets and current assets (including receivables, inventories, spare parts, inventories, flows of cash) of the FRL.

Reliance defended its decision to take over the stores, in a recent letter, saying it had to guarantee dues owed by Future Retail. Reliance said the lenders were secured creditors, and if they planned to take Future Retail to the NCLT or debt collection courts, Reliance wouldn’t have a chance to get its money back.

Future Group and Reliance Industries respond to Guidelines to question.

According to reports, Reliance provided financial support of ₹4,800 crore comprising ₹1,100 crore of unpaid rent and ₹3,700 crore of working capital.

In August 2020, Reliance had agreed to buy the assets of several Future Group companies. He had decided to buy the assets of the company’s logistics, retail and wholesale businesses owned by Kishore Biyani among others at a valuation of ₹24,713 crore.

However, Amazon, which had invested in one of the Future group companies in 2019 for ₹1,400 crore, had opposed the deal. He had taken the Future Group companies to arbitration on the grounds that he had breached an agreement in which Reliance was a restricted party.

After the e-commerce giant won an interim ruling in its favor, it went to Indian courts to seek redress. This was opposed by Future Group. Since then, several court cases have been heard in different courts.

According to Future Group, which has been posting losses for at least five quarters, this has further hurt the financial strength of the company. The company has, among other things, defaulted on payments to lenders and suppliers.

Published on

April 01, 2022