RIL: After Most FRL Lenders Vote Against Deal RIL: Reliance Industries and Future Group Companies Declare Deal Canceled

Reliance Industries Ltd (RIL) has canceled its agreement to purchase the assets of Future Group following the rejection of the proposal by a majority of lenders to flagship Future Retail Ltd (FRL).

This apparently closes the curtain on an acquisition plan that was announced in 2020 and then became the cause of a legal battle between Amazon and Future, founded by Kishore Biyani, that went all the way to the Supreme Court as well. than an arbitration tribunal in Singapore. .

FRL had said on Friday that 69% of lenders voted against the plan while 86% of shareholders backed it.

“According to these results, shareholders and unsecured creditors of the FRL voted in favor of the plan. But the FRL’s secured creditors voted against the plan. In light of this, the subject plan of arrangement cannot be implemented,” RIL advised the exchanges in a regulatory filing on Saturday.

This means the Future Group companies have moved one step closer to filing for bankruptcy, experts said.

On Saturday, Future Group’s six listed entities also told exchanges in regulatory filings that the deal with Reliance was cancelled.

“We refer to our earlier communication dated April 22, 2022 in which the voting results of the meetings of shareholders, secured creditors and unsecured creditors convened by NCLT were communicated,” FRL said in a filing to the stock exchanges on Saturday.

Legal challenges

“In view of the result already communicated, we would like to inform that the program in question cannot be implemented,” FRL said in the filing. Similar filings have been made by Future Lifestyle Fashion, Future Enterprises, Future Consumer, Future Market Networks and Future Supply Chain Solutions.

In August 2020, RIL’s subsidiary Reliance Retail Ventures Ltd agreed to buy the assets and business of Future Group on the basis of a down sale for ₹25,000 crore. However, the deal has stalled due to legal challenges from Amazon, which has filed suits in the Supreme Court, the Delhi High Court and the Singapore International Arbitration Center (SIAC).

In 2019, Amazon acquired a 49% stake in Future Coupons Pvt Ltd (FCPL), which owns a 10% stake in FRL. Pursuant to the FCPL investment agreements, Amazon said FRL was prohibited from selling its assets to certain entities, including Reliance. Amazon won a stay of SIAC’s Future-Reliance deal in October 2020, triggering dozens of lawsuits between Amazon and Future Group.

Secured and unsecured creditors and shareholders of six Future Group companies voted on Wednesday and Thursday in a process mandated by the National Company Law Tribunal (NCLT).

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