Amidst its corporate insolvency predicament, Future Enterprises has received resolution plans from Jindal (India) Ltd, Reliance Retail Ventures, and GBTL Ltd. It is worth noting that the burden of verified claims from lenders is an astounding Rs 12,265 crore. Furthermore, it is critical to acknowledge that four other companies under the Future Group umbrella are currently grappling with insolvency challenges. Although hope may be emerging for prospects of recovery in their case, it is important to recognize that uncertainties persist.
Future Enterprises a beleaguered entity facing corporate insolvency finds itself in a quagmire as it receives resolution plans from Jindal (India) Ltd, Reliance Retail Ventures, and GBTL Ltd. These plans disclosed by the company to the stock exchange present a glimmer of hope.
The National Company Law Tribunal on February 27 granted admission to Kishore Biyani’s Future Enterprises for corporate insolvency. Avil Menezes; the newly appointed resolution professional has now unveiled a provisional list of prospective resolution applicants which includes the aforementioned three entities.
The resolution professional has been confronted with a substantial burden as verified claims from lenders amount to a staggering Rs 12,265 crore. In addition, fixed deposit holders have filed claims worth Rs 23 crore. Future Enterprises had relied heavily on bonds for borrowing resulting in numerous trusteeship companies filing claims. Among them, Centbank Financial Services has filed the largest claim standing at Rs 3,344 crore closely followed by Axis Trustee Services at Rs 1,341 crore and Vistra ITCL (India) at Rs 210 crore.
This dire situation extends beyond Future Enterprises alone as four other companies within the Kishore Biyani-promoted Future Group are also undergoing insolvency proceedings. Future Retail Ltd, Future Lifestyles Fashion Ltd, and Future Supply Chain Ltd find themselves entangled in this intricate web of financial turmoil. The Future Group had already been burdened by excessive leverage and the nationwide lockdown imposed in 2020 to combat the spread of Covid-19 only exacerbated their struggles. As a result many of their hypermarket stores located within malls remained shuttered for an extended period.
In an attempt to alleviate their predicament, a deal was struck in August 2020 wherein the entire business of Future Group would be sold to subsidiaries affiliated with Reliance Industries through a multi-stage transaction.
Unfortunately, this transaction encountered a series of legal battles initiated by e-commerce giant Amazon.com which claimed a violation of a shareholder agreement it had with Future Group Consequently the deal was delayed casting a further shadow of uncertainty.
Reliance Industries taking matters into their own hands seized possession of the premises housing approximately 900 Future Retail stores in March 2022 citing non-payment of rent. In April of the previous year, the majority of secured lenders rejected the deal proposed by Reliance Industries. This rejection ultimately led to the admission of the four Future Group companies for corporate insolvency.
The journey of Future Enterprises and its affiliated companies continue to unfold as they navigate through the stormy waters of insolvency While resolution plans from prominent entities offer a flicker of hope the path to stability remains troublesome.
