Future Retail appeals to the Supreme Court against the lenders’ insolvency notification, requesting more time

Future Retail is running out of time, as the Kishore Biyani-backed retailer has filed a Supreme Court petition seeking an extension on the January 29 deadline to repay lenders Rs 3,500 crore in debt installments.

Future, India’s second-largest retailer, has been unable to execute a USD 3.4 billion retail asset transfer to a competitor since 2020 owing to a dispute with Amazon, which claims the business violated certain non-compete contractual conditions. According to a report, Future denies any involvement.

Future warned Indian stock exchanges in January that it will be unable to pay its lenders 35 billion rupees (USD 470 million) due to its inability to sell certain small stores due to the Amazon disagreement on December 31. It had wanted to fix the matter within a 30-day grace period.

Future, after failing to do so, requested the Supreme Court on Tuesday to urge its lenders and the country’s central bank to give it extra time to complete the transaction and avoid being classed as a defaulter.

Future’s current court fight reflects the retailer’s rising anxiety, as it has stated that it fears insolvency and the loss of over 27,000 jobs at its retail segment if its plan to sell assets to rival Reliance Industries fails.

Future’s filing also included a letter dated January 15 from the State Bank of India (SBI) telling the company that if it does not pay the sum owed to lenders, it may face legal action.

According to SBI’s letter, this might entail “initiating insolvency processes” against Future, which would be following Indian law.

Future Retail, the company’s major retail subsidiary, requested that such default notifications from its lenders be quashed, according to its filing.

Future’s attorney Yugandhara Pawar Jha said in the filing that the company “finds itself in an unusual position where it seeks to comply” with its obligations to lenders, but that “the litigation with Amazon is effectively prohibiting it from doing so.”

Amazon claims Future broke the terms of a 2019 arrangement in which the two companies agreed to spend USD 200 million in a Future entity. A Singapore arbitration and Indian courts have so far supported the US company’s argument.

Future has 1,700 locations around the United States. There are about 900 small stores among them, with the rest consisting of large-format hypermarkets and fashion boutiques.

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