frl: Amazon seeks to block sale of Future’s small-format stores – Times of India
NEW DELHI: Amazon has written to Big Bazaar parent Future Retail (FRL) in an effort to block the probable sale of the latter’s small-format chain of stores that operate under the Easyday and Heritage Fresh brands.
In addition, the US e-tailer has offered financial help to the cash-strapped retailer. The development comes against the backdrop of an ongoing legal battle between the two retail heavyweights on the one hand and FRL’s lenders looking to sell the stores to recover Rs 3,500 crore in dues on the other.
The amount is the first tranche of Rs 14,000-15,000 crore that Future Group owes to its lenders as part of the one-time restructuring scheme signed between the retailer and the banks, said three people in know of the matter. The Kishore Biyanipromoted group failed to honour the payment of the first tranche that was due at the end of the last year.
“Please note that any sale of small-format stores without obtaining the consent of Amazon would be in violation of the injunctions which continue to operate and are binding on FRL and directors of FRL, including the independent directors of FRL. We are more than willing to explore effective solutions to assist FRL,” Amazon wrote in the letter, dated January19. trying to block FRL’s proposed sale of assets to Reliance Retail for Rs 25,000 crore, in 2019, invested Rs 1,500 crore to pick up a 49% stake in Future Coupons (FCPL), which held a minority stake in FRL.
The Jeff Bezos-led e-tailer since then has argued in various courts that its protective rights over FRL and therefore FRL’s assets cannot be sold to Reliance without its consent.
“We reiterate our willingness and ability to assist FRL in addressing any financial concerns of FRL, within the framework of the agreements, including the solution proposed in the term sheet between Samara Capital, and FRL, which contemplated an infusion of Rs 7,000 crore in FRL,” Amazon wrote in the letter.
While Amazon and FRL did not comment on this story, sources told TOI that FRL’s lenders are not bound by any agreements with Amazon and they can invite bids for the stores as these assets are hypothecated to the banks. In December, however, the Competition Commission of India (CCI) temporarily suspended its approval of Amazon’s FCPL deal due to the e-tailer allegedly suppressing facts. Amazon has challenged CCI’s decision at the National Company Law Appellate Tribunal (NCLAT) and the next date of hearing is on February 2.
In addition, the US e-tailer has offered financial help to the cash-strapped retailer. The development comes against the backdrop of an ongoing legal battle between the two retail heavyweights on the one hand and FRL’s lenders looking to sell the stores to recover Rs 3,500 crore in dues on the other.
The amount is the first tranche of Rs 14,000-15,000 crore that Future Group owes to its lenders as part of the one-time restructuring scheme signed between the retailer and the banks, said three people in know of the matter. The Kishore Biyanipromoted group failed to honour the payment of the first tranche that was due at the end of the last year.
“Please note that any sale of small-format stores without obtaining the consent of Amazon would be in violation of the injunctions which continue to operate and are binding on FRL and directors of FRL, including the independent directors of FRL. We are more than willing to explore effective solutions to assist FRL,” Amazon wrote in the letter, dated January19. trying to block FRL’s proposed sale of assets to Reliance Retail for Rs 25,000 crore, in 2019, invested Rs 1,500 crore to pick up a 49% stake in Future Coupons (FCPL), which held a minority stake in FRL.
The Jeff Bezos-led e-tailer since then has argued in various courts that its protective rights over FRL and therefore FRL’s assets cannot be sold to Reliance without its consent.
“We reiterate our willingness and ability to assist FRL in addressing any financial concerns of FRL, within the framework of the agreements, including the solution proposed in the term sheet between Samara Capital, and FRL, which contemplated an infusion of Rs 7,000 crore in FRL,” Amazon wrote in the letter.
While Amazon and FRL did not comment on this story, sources told TOI that FRL’s lenders are not bound by any agreements with Amazon and they can invite bids for the stores as these assets are hypothecated to the banks. In December, however, the Competition Commission of India (CCI) temporarily suspended its approval of Amazon’s FCPL deal due to the e-tailer allegedly suppressing facts. Amazon has challenged CCI’s decision at the National Company Law Appellate Tribunal (NCLAT) and the next date of hearing is on February 2.
