Insolvency Plea Filed Against Future Retail After Over ?5,000 Crore Payment Default

Debt-ridden Future Retail, which is amidst the battle with Amazon over asset sale to Reliance Industries, has now ran into another trouble.

Bank of India has reportedly filed a petition to initiate insolvency proceedings against Future Retail Ltd at the National Company Law Tribunal (NCLT).

Earlier this month, Future Retail had reported a default of ?5,322.32 crore to its lenders over ongoing litigation with Amazon and other related issues.

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Also Read: Future Retail Shuts Down Big Bazaar As Reliance Plans Takeover

Bank Of India's Plea Against Future Retail

As per a report in ET, Future Retail said in a regulatory filing "Bank of India (BoI) has served an advance intimation of filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the company for default on non-payment of monies due in terms of the Framework Agreement entered into between the company and Bank of India."

Future Retail also added that it has received a copy of the petition and is in the "process of taking legal advice".

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Last month, Bank of India, which is the lead banker of the consortium of lenders of Future Retail, had claimed its charge over the assets of the firm,through a public notice in newspapers.

It had also warned the public against dealing with assets of the Kishore Biyani-led Future group firm.

Several Future Group companies, including Future retail ltd, had entered into agreements with their respective lenders in terms of the RBI circular dated August 6, 2020, in which a resolution framework for COVID-related stress was announced.

Future Retail Ltd is part of the ? 24,713 crore deal announced by Future Group in August 2020, under which it is to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL), as per ET.

All 19 companies would be consolidated into one entity, i.e. Future Enterprises Ltd, and then transferred to RRVL under the proposed deal.

Over the next week, Future Group companies will reportedly be conducting meetings of their respective shareholders and creditors between April 20-23, 2022 to seek their approval for the Rs 24,713 crore deal.

The deal has long been contested by Amazon and is under litigation at various forums, including the Supreme Court, Delhi High Court and Singapore International Arbitration Center.

Earlier this week, Amazon had warned FRL against holding meetings of its shareholders and creditors to approve the sale of its retail assets to Reliance Retail.

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