FRL secured votes of 85.9% shareholders in favour of the proposed INR 24,713 crore deal with Reliance.
78.22% of the unsecured creditors also voted in favour of the proposed deal.
However, a majority of secured creditors voted against the deal. As many as 69.29% of them vetoed the proposal
Future Retail Ltd’s (FRL) plan to sell its assets to Reliance Industries Ltd (RIL) has failed as a majority of shareholders of the debt-laden company voted against the INR 24,713 crore deal.
In an exchange filing on Friday (April 22), FRL said a majority of its secured creditors voted against the deal. While 29.57% votes were cast in favour of the deal, 65.05% votes were against the deal.
FRL’s lenders include Union Bank of India, Bank of India, Bank of Baroda, State Bank of India, Indian Bank, Central Bank, Axis Bank and IDBI Bank.
FRL did manage to get the approval for the deal from its shareholders and unsecured creditors. While 85.9% of shareholders voted in favour of the deal, 78.22% of unsecured creditors supported the deal.
The development comes as a blow to FRL which was trying to sell its assets to the Mukesh Ambani-led company to pay its debt.
FRL has been in a standoff with ecommerce giant Amazon over the contentious deal. On April 15, FRL had said that it would proceed with the meeting of its shareholders and creditors, citing directives issued by the National Company Law Tribunal (NCLT). Amazon had termed the meetings ’illegal.’
In a 16-page letter to Kishore Biyani and other promoters, the ecommerce giant had said that the meetings violated Singapore arbitral tribunal’s injunction on the sale of retail assets to Reliance.
The Contentious Deal
At the heart of the dispute is the INR 24,713 Cr sale of Future Group’s retail assets to RIL that was announced in August 2020. Amazon claims that due to its indirect stake in Future Retail, Future Group is prohibited from carrying out the transaction with RIL.
The two sides have also been warring on a slew of issues and have dragged the matter to a host of adjudicating bodies across borders.
The issue escalated after RIL, in February, quietly started taking over the rental leases of stores run by Future Group. Later, FRL accused RIL of forcefully taking over its stores. Future Group’s possession includes more than 1,700 outlets, including the popular Big Bazaar stores.
Amazon had proposed one-on-one talks with Future Group to resolve the standoff. However, the talks collapsed on March 15.Later, the US-based ecommerce platform took out large ads in many Indian dailies, accusing both FRL and RIL of indulging in fraudulent practices.
Earlier this month, reports also stated that the US-based company had accused FRL of allegedly pursuing an ‘elaborate and orchestrated fraud’ to secure a favourable verdict in the courts.
Hitting back, FRL recently alleged that Amazon had successfully destroyed an INR 26,000 Cr company. The company also informed the Supreme Court earlier this month that it was barely ‘hanging by a thread’, adding that its bank accounts were frozen and was even unable to pay rent.
The Kishore Biyani-led company is currently saddled with a debt of more than INR 10,000 Cr, including short-term and long-term loans.
