Future group lenders issue public notice to protect interests as stores change hands
Public sector lender Bank of India has warned the public against manipulating the assets of Future Retail Ltd, through a press advisory. Bank of India is acting as an agent for other lenders, it said in the notice.
In a public notice published in leading newspapers on Tuesday, the lender said Bank of India, as Future Retail’s lead lender, was in charge of the company’s assets. The bank said Future Retail had borrowed money from a group of lenders, who are classed as senior lenders.
“With regard to the same, we would like to inform that all these sums are guaranteed, among other things, by a charge on movable fixed assets and current assets (including receivables, stocks, spare parts, inventories , cash flows) of the FRL,” the notice read. .
Bank of India has informed the public that assets of Future Group are still charged to lenders and anyone dealing with them may be subject to enforcement action by the lenders.
The notice came after Future Retail and Future Lifestyle Fashions informed exchanges that Mukesh Ambani’s Reliance Group entities had sent lease termination notices to the two companies. Future Retail said it received such notices for 835 stores and Future Lifestyle received it for 112 of those stores.
“These stores have historically contributed 55-65% of the company’s retail revenue. At this time, these stores are not operational for stock and inventory reconciliation,” the two companies said. in their respective exchange declarations.
At this point, the situation at the Future Group companies is a complete mess, the lenders told BloombergQuint last week. The lenders pinned their hopes on talks between Amazon Inc. and Future Group to reach a solution. However, on Tuesday, Amazon informed the court that talks with Future Group had failed.
A sale of retail assets by Future Group to Reliance Retail Ventures Ltd. announced in August 2020 was blocked due to a legal challenge mounted by Amazon.
This is the second major action taken by the banks against the Group’s future companies. In February, lenders informed the courts that they had begun classifying Future Group companies as non-performing assets in the January-March quarter.
So far, lenders have avoided insolvency proceedings against Future Group, as they believe such a move could lead to further erosion of value.
According to a person directly involved in the lenders’ talks with Future Group, insolvency is now a strong possibility as no other solution has been found. The person spoke on condition of anonymity.
In addition to lenders, Amazon issued a press advisory warning people not to engage with Future Group, saying any attempt by Future Retail and its promoters to sell or transfer its retail assets is in violation of an order from the Singapore International Arbitration Center. He also said that any party aiding or cooperating in such fraudulent and absentee actions will be liable for civil and criminal consequences.