Future Retail gets interest from Reliance, Adani, 14 other suitors under IBC

Kishore Biyani's flagship company Future Retail Ltd received as many as sixteen expressions of interest (EOI) under the bankruptcy law, two people directly aware of the matter told CNBC-TV18.

Of the 16 EOIs players who submitted these EOIs, one has already withdrawn from the race, CNBC-TV18 has learnt, leaving 15 suitors in the fray. Among the most prominent suitors are two conglomerates- Reliance Industries via its company Reliance Retail Ventures Ltd, and Adani Group via April Moon Retail Private Ltd- a joint venture between Adani Airport holding Ltd and promoters of Flemingo Group, according to people in the know. Capri Global Holdings, OP Jindal Group’s Nalwa Steel and Power, Shalimar Corporation, WHSmith Travel Ltd and United Biotech Private Ltd are among others, CNBC-TV18 learnt.

Dharampal Satyapal Ltd, Dickey Alternative Investment Trust (DAIT), SNVK Hospitality and Management Private Ltd, a consortium between B-right Real estate Ltd and Ayekart Fintech Private Ltd, April Moon Retail Private Ltd (JV between Adani Airport Holding Ltd and promoters of Flemingo Group), Bommidala Enterprises Private Ltd, Gordon and Payard, UV Multiple Asset Investment Trust-UV Special Situation fund and another little known consortium between individuals Bhumireddy Gari Mohan Reddy, Rajendra Kumar Goel and Naveen, have also submitted EOIs, as per people directly involved in the matter.

Payard Investments Private Limited has submitted its expression of interest purportedly in a consortium with Gordon Brothers, further details of which are awaited from them.

UV stressed asset management, which has submitted an EOI in a consortium with Suruchi Foods, has withdrawn from the race, it is understood.

"Not all are serious bidders. We have seen a lot of EOIs getting submitted in many companies, but fewer conversions to actual bids," said a banker with substantial exposure to the company.

The committee of creditors is expected to hold a meeting in the next few days to discuss the offers and evaluate the next steps, this banker added.

As per the EOI documents published on the company's website, Future Retail had a pan-India presence with 1,308 stores in 397 cities across various formats/ stores as of FY21.

However, as of the Insolvency Commencement Date (July 20, 2022), it only has access to 302 leased retail stores across the country, which included 30 large format stores like Big Bazaar and FBB stores, and 272 small format stores. The fixed assets of the company largely comprise furniture and fixtures and Leasehold Improvements at various leased retail stores, the document showed.

Earlier in March this year, Future Retail had informed exchanges that it has received certain termination notices in respect of sub-leased properties from Reliance Group. The company said that it received notices for 342 large-format stores and 493 small-format stores.

The takeover of FRL stores by Reliance happened after Future was unable to pay dues on these leased properties amid a cash crunch.

In August 2020, the Kishore Biyani-led Future Group announced a Rs 24,713-crore deal with Reliance Retail Ventures Ltd (RRVL) for the sale of its retail and wholesale business, and the logistics and warehousing verticals, but the deal could not be concluded due to legal issues.

Future Retail’s takeover by Reliance was opposed by Amazon, which dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020.

With no clarity on the deal closure for almost two years, lenders led by Bank of India took Future Retail to the bankruptcy court in July this year.

Future Retail has received claims of Rs 21,433 crore from financial creditors, Rs 2,464 crore from operational creditors, and Rs 55 crore from workmen/ employees under IBC. Bank of India, State Bank of India, Union Bank, and Canara Bank are among the large lenders to the company.