The debt-ridden Future Group is now focusing on rescuing and rebuilding companies such as – Future Lifestyle Fashions, Future Supply Chain Solutions, Future Consumer and Future Enterprises, after the $ 24,713 Rs deal with Reliance Retail was rejected by secured creditors, according to industry sources.
However, Future Group’s flagship company Future Retail Ltd (FRL), which has a debt of almost Rs 18,000 crs, is required to face the company’s insolvency settlement process before the National Company Law Tribunal (NCLT).
Other companies like Future Enterprises Ltd (FEL), Future Lifestyle Fashions Ltd (FLFL), Future Supply Chain Solutions Ltd (FSCSL), Future Consumer Ltd (FCL) can sustain on their own and can be rebuilt by restructuring their commitments using current lenders and investors, said an industry source close to the Future Group.
” FEL has over Rs 5,000 crore loans and since then the company is selling its stake in Future Generali India Insurance business. Now it gets about 3,000 million Rs. The deal is almost complete. So it will leave a small amount of debt and it can be managed by FEL, ” said a source.
The FMCG company FCL has assets such as a 110-hectare food park in Tumkur, Karnataka, which can be used to rebuild the company, he added.
FSCSL has warehouses all over the country. In Nagpur, FSCSL has one of the largest and most automated distribution centers in India. ” Therefore, investors would be more committed to supporting and rebuilding these companies, ” he added.
When contacted, a spokesman for the Future Group declined to comment.
Billionaire Mukesh Ambani-led Reliance Industries Ltd on Saturday terminated its Rs 24,713 crore deal to acquire Future Group’s retail, wholesale, logistics and warehousing assets after the secured creditors of the Kishore Biyani-led companies voted against it.
Future Lifestyle Fashions Ltd (FLFL), which handles Future Group’s flagship fashion business, has so far not defaulted on any loan repayments, and here the group would raise money after divesting some of the few key brands in its portfolio.
FLFL has in-house retail chains Central and Brand Factory, exclusive brand outlets (EBOs) and other multi-brand outlets (MBOs of nearly a dozen clothing brands, including – Lee Cooper, Champion, aLL, Indigo Nation, Giovani, John Miller, Scullers, Converse and Urbana in its portfolio.
In addition, FLFL has also shown a very good recovery in business after COVID, and operating costs for its remaining stores have dropped by over 20 percent, a source added.
The Bank of India, a financial creditor of the FRL, has already filed a petition to the Mumbai bench of the NCLT with a request to initiate insolvency proceedings against the company. The public lender has also suggested the name of a liquidation professional and put the company under moratorium.
The insolvency court has yet to start hearing against FRL, which operates retail chains under the Big Bazaar, fbb, Foodhall, Easyday and Nilgiris brands.
In addition, FRL is also facing an insolvency petition from some of its operating creditors, such as Hindustan Coca-Cola Beverages Ltd (HCCBL).
HCCBL, the bottling arm of Coca-Cola in India, an operational creditor of the FRL, has filed a plea under section 9 of the Insolvency & Bankruptcy Code (IBC).
HCCBL’s petition is set for May 2, for the Mumbai bench for the next hearing.
FEL lenders also have plans to take over FEL, which last week had defaulted on the repayment of Rs 2,911.51 crore loan to its lenders, to the insolvency court, he added.
The due date for payment of Rs 2,835.65 crore was 31 March 2022. FEL had an audit period of 30 days under the One Time Restructuring (OTR) scheme for COVID-affected companies with its consortium of banks and missed it.