Future will have to liquidate assets if the Reliance Big Bazaar deal fails, and as a result around 29,000 will lose jobs overnight. Future Retail Ltd (FRL) will go into liquidation if the group is not able to sell assets to Reliance Industries, FRL told the Singapore arbitrator.
Amazon has already won the interim arbitration against Future group.
The e-commerce giant challenged the Reliance Future deal worth $3.4 billion. If the sale of assets fails, Future Retail will have to liquidate the assets. According to Amazon, Future cannot go into any deal with restricted parties of Amazon.
Amazon Wants To Enter Retail Badly?
The Future’s deal to sell assets to Reliance have already been halted after the decision. Amazon has openly alleged Future Group breaching contract provisions when both the parties entered into a separate deal last year.
Future Retail Ltd was sold to Reliance Industries in August which includes Future’s retail, wholesale, logistics and some other businesses for $3.38 billion, including debt.
According to Amazon, FRL and the e-commerce company entered into a deal in 2019 which prohibits Future Retail Ltd from selling its retail assets to anyone from the restricted persons list and it includes Reliance. As per the deal, the disputes will be arbitrated under the Singapore International Arbitration Centre rules.
What Would Future-Reliance Deal Failure Mean?
If the Future Reliance deal fails, Future Retail Ltd will go into liquidation. That means more than 29,000 employees of FRL will lose jobs, the Indian retail giant mentioned at the hearing. Amazon continues to argue that Future Retail Ltd have breached the agreements.
Future Retail Ltd have more than 1,500 outlets in the country.
Shares of both RIL and FRL fell on Monday. Future Retail Ltd and Reliance Industries have said that they will complete the deal “without any delay”, a stiff battle expected between two of the world’s richest men: Mukesh Ambani and Jeff Bezos. Amazon till now has invested $6.5 billion in the Indian market.
Amazon already owns More Retail supermarkets (previously owned by Aditya Birla group) and plans to have a stronger foothold in the retail business. Similarly Reliance group is rapidly expanding its e-commerce business, as both the giants are trying to cross each other in their respective domains.