With 13 potential bidders in the process of completing the valuation of the liabilities in Future Retail (FRL), bankers expect a better recovery rate on their ₹21,555 crore claims. The prospective bidders are expected to submit their final resolution plan by mid-January, executives involved in the process said.
Mukesh Ambani-controlled Reliance Retail Ventures Ltd (RRVL), which failed to complete its 24,713 crore futures asset takeover last year, is one of the frontrunners in FRL purchases. April Moon Retail (a joint venture between Adani Group and Flemingo Group), WH Smith Travel and Dharampal Satyapal are also in the process of acquiring the company to expand their retail presence.
Financial creditors, which include banks and financial institutions, have so far claimed 21,555 crore from FRL. Of this, Rs 19,433 crore has been verified by the settlement expert as of 30th November.
Per the Expression of Interest (EoI) Invitation Document, FRL has a network of 302 leased retail locations in 23 states and union territories. It consists of 30 large format stores such as Big Bazaar and FBB and 272 small format stores. However, the size of the largely non-functional network is not sufficient to be able to fully collect the liabilities, said a managing director involved in the process.
The original deadline for submitting final bids was December 15th. However, it was delayed because several potential bidders were unable to complete the assessment of the liabilities.
On November 20, the liquidation expert selected 13 companies as potential bidders. The list of potential bidders also includes Capri Global Holdings, Nalwa Steel and Power, Shalimar Corp, a consortium between B-Right Real Estate and Ayekart Fintech, Bommidala Enterprises, Dickey Alternative Investment Trust, a consortium between Payard Investments and Gordon Brothers International, SNVK Hospitality and Management and United Biotech.
The Bank of India filed the bankruptcy lawsuit against FRL after the latter failed to make loan repayments. On July 20, the Mumbai chamber of the National Company Law Tribunal (NCLT) ordered the CIRP (Corporate Insolvency Resolution Process) to be initiated against FRL. Previously, The lenders had refused to take over 24,713 crore of the 19 Future group companies, including FRL, from Reliance Retail Ventures Ltd despite legal objections from Amazon.
FRL announced in February that its 835 retail stores, which account for 55 percent to 65 percent of its revenue, were closing due to tight cash flows and an inability to pay lease rents. Reliance Retail took over these stores as if they had been sublet from Reliance to Future Retail. The Ambani-controlled retailer subsequently opened its own stores in those locations under the new “Smart” branding. Amazon has challenged the move and the matter is being heard by the Supreme Court.
