CORPORATE

Secured lenders of Future Retail reject deal with Reliance Retail

Secured lenders of Future Group firm Future Retail (FRL) on Friday rejected a Rs 24,713-crore deal with Reliance Retail for acquisition by a majority vote.


FRL informed the stock exchanges on Friday that the lenders giving it secured loans had disagreed with the agreement signed with Reliance Retail with a majority of 69.29 per cent. The proposal put forward for the approval of this agreement got the approval of only 30.71 per cent of the lenders.


Earlier, the deal between FRL and Reliance Retail had got the support of more than 75 per cent shareholders and unsecured lenders. Some 85.94 per cent shareholders of the company had voted in favour of the proposal, while it had got the support of 78.22 per cent of the unsecured lenders.


But the proposal did not get the required support from at least 75 per cent of the secured lenders. Secured lenders are given collateral from the borrower company and have priority over unsecured lenders at the time of repayment of any dues.


Another Kishore Biyani-led group company Future Lifestyle Fashion said that 82.75 per cent of its secured creditors had also voted against the deal. However, the majority of shareholders and unsecured creditors had supported it.


This week, several Future Group companies called meetings of their shareholders, secured and unsecured lenders, in which it was proposed to seal the merger deal with Reliance Retail.


Announcing the deal in August 2020, the Future Group had said that 19 of its companies operating in the retail, wholesale, logistics and warehousing sectors would be sold to Reliance Retail Ventures.


American e-commerce company Amazon has been continuously opposing this deal. It says that the deal is in violation of Future’s Rs 1,500-crore investment agreement with it in 2019.

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