Big Bazaar Owners Need To Pay Rs 1000 Crore In Next 20 Days Or Face Severe Legal Action! Can Reliance Rescue Them?
The Future Group is facing legal measures on failure to payments worth $14 million. This will drastically affect the ongoing operations of Future Group, as they try to complete the deal with Reliance Retail.
Read on to find out all the details!
Future Group Needs To Clear $14 Million Worth Coupon Payments
The Kishore Biyani-led FMCG, Future Group has to clear $14 million worth of scheduled coupon payments this month. And if they are unable to clear this payment, bondholders will initiate legal measures against the company.
Recently, we reported that Reliance Retail Ventures has asked National Company Law Tribunal (NCLT) for permission to hold a shareholders’ meet to consider and approve its Rs 24,715-crore deal with Future Retail. Future Group announced on August 29, 2020, that it would sell its retail and wholesale division to Reliance Retail for Rs 24,713 crore.
On the other hand, Amazon contested the plea on grounds that NCLT hearings are illegal if the award by the emergency arbitrator in Singapore persists, as there is no stay on this order. Amazon’s counsel argued that any step towards the Reliance-Future deal prejudices Amazon and violates the US-based retailer’s rights.
What Happens if Legal Action Is Initiated?
Coming to the story on hand, some industry experts are saying that if such legal action is initiated by bond investors against the company, it will have a huge impact on the company’s ongoing operations, especially after the Supreme Court has ordered the halt of the company’s mega Rs 24,713 crore deal with Reliance Retail.
However, there are some investors who are wary that they will have to face a huge cut-off on the Rs 21,000-crore debt that the Future Group owes if the company is forced into insolvency.
The Supreme Court has taken Amazon’s side in its dispute with Future Retail Ltd (FRL). The SC said that the Singapore International Arbitration Centre’s (SIAC) award preventing the deal from going ahead held good under Section 17 (1) of the Arbitration and Conciliation Act.
The SIAC had barred the deal from proceeding in October 2020 and created a three-member panel to pass the final verdict which is yet pending.
The Future Group owes Rs. 21000 crore to 28 local and foreign banks.