Future Retail’s lenders have petitioned India’s Supreme Court that the company’s assets should be auctioned after it missed payments. Future Retail is being pursued by Reliance Industries and Amazon.com Inc.
They also stated that they have begun classifying loans to the country’s second-largest retailer as non-performing and that as a result of the non-payment, they will have to make combined provisions of 80 billion-90 billion rupees (USD 1.1 billion-USD 1.2 billion).
“Let it be exposed to an open bid…This is the only solution,” Rakesh Dwivedi, a lawyer representing about 30 or so of Future’s lenders, said the Supreme Court judges, citing Future and Amazon’s long-running legal battle.
Future’s two suitors, Amazon and Reliance, might potentially bid for the retailer’s assets, according to Dwivedi.
On Thursday, the court made no decisions and stated that it would hear the case again in the future. Future has remained silent on the subject.
After business partner Amazon successfully claimed in arbitration and court that the Indian retail behemoth violated some non-compete contractual restrictions, Future was unable to execute a planned $3.4 billion sale of its retail operations to Reliance.
Future has vehemently denied any misconduct on his part.
When Indian investment restrictions allow, Amazon wants to purchase a piece of Future, but it says its intentions will be thwarted if Future is allowed to sell its assets.
Future claimed it was unable to pay lenders 35 billion rupees ($470 million) on December 31 because it was unable to sell certain small businesses owing to its dispute with Amazon. It had wanted to fix the matter using a 30-day grace period but was unable to do so.
Future launched a lawsuit against its lenders last month to prevent them from filing for bankruptcy, aiming to buy more time to make payments and avoid having its debts categorized as non-performing, which would give the banks more control over its finances.
Future has 1,700 stores, including 900 small-format stores and the remainder are large-format hypermarkets and retail outlets, which have been heavily damaged by the pandemic.
