Reliance Extends Deadline For $3.4 Bn Future Retail Deal By 6 Months

SUMMARY

The previous deadline ended on Thursday, September 30, 2021. The deadline was first extended in April 2021

The National Company Law Tribunal (NCLT) recently allowed the Kishore Biyani-led Future Retail to hold a meeting of its shareholders and creditors seeking their approval of the sale of its retail assets to the Reliance Industries (RIL) subsidiary

In 2020, Future Group entered into an asset sale deal worth $3.4 Bn with Mukesh Ambani-led RIL, wherein it would sell its retail, wholesale, logistics and warehousing assets to Reliance Retail

As litigations are underway against the Reliance-Future Retail deal, Reliance Retail Ventures Ltd has extended the deadline to complete the proposed acquisition of Future Group’s retail assets for $3.4 Bn till March 31, 2022.

The previous deadline ended on Thursday, September 30, 2021. The deadline was first extended in April 2021.

“Reliance Retail Ventures Limited (“RRVL”) has in exercise of the right provided thereunder, extended the timeline for Long Stop Date from September 30, 2021 to March 31, 2022, to which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly-owned subsidiary of RRVL,” Future Retail said in an exchange filing.

The Mumbai-bench of NCLT has also rejected the intervention application filed by Amazon against the proposed acquisition by the Reliance Industries’ (RIL) subsidiary, Future Retail said in an exchange filing on Tuesday.

Despite the NCLT’s approval to Future Retail, Amazon would be able to raise objections when the scheme is filed at the tribunal for its final approval post approval by the shareholders and creditors.

The two-member bench of the tribunal observed that the Supreme Court had only restrained it from pronouncing the final order approving the scheme.

Earlier this month, the apex court stayed all the further proceedings initiated by ecommerce giant Amazon before the Delhi High Court for four weeks.

Amazon and Future Group have been in a legal battle since 2020.

Promoter entity of Future Retail, Future Coupons, acquired a 49% stake in Future Coupons for INR 1,500 Cr, in 2019, which in turn owns 7.3% shares in Future Retail. Through this transaction, Amazon had also managed to acquire around a 3.58% stake in Future Group.

In the following year, Future Group entered into an asset sale deal worth $3.4 Bn with Mukesh Ambani-led RIL, wherein it would sell its retail, wholesale, logistics and warehousing assets to Reliance Retail.

This deal was the beginning of an extensive battle between Amazon and Future Retail.