Future-RIL Deal: Lenders wary of terms ahead of end of voting process

“We are not privy to negotiations between Future and Reliance, and after the store takeover, we want comfort from Reliance that it will settle dues,” said a senior executive at a large public sector bank.

Another banker expressed reservations that the value of the deal may come down significantly as over 800 of Future Retail’s stores have already been taken over by Reliance, which leaves no clarity as to how RIL may value the deal.

Earlier in February, Future Retail had said in a stock exchange filing, "The company has received certain termination notice(s) in respect of sub-leased properties from Reliance entities… So far notices have been received in respect of 342 large format stores (such as Big Bazaar, Fashion@ Big Bazaar (fbb)) and 493 small-format stores (such as Easyday and Heritage stores) of the company… received termination notices for 34 'Central' stores and 78 'Brand Factory' stores… These stores have been historically contributing approximately 55 percent to 65 percent of retail revenue operations of the company. As of now, these stores are not operational for stock and inventory reconciliation."

“How can we approve a deal where we don’t know how much money we will recover?” asked one of the bankers quoted earlier. Last week, State Bank of India had also sought accountability from Future Retail on the takeover of stores by Reliance.

"You are requested to advise us what steps have been taken by you to safeguard lenders' interest in this matter and efforts taken by you to get back the company's asset taken over by RRPMSL," SBI wrote in the letter dated April 18.

Although Reliance has extended the long stop date of the scheme of arrangement between itself and Future Retail by six months up to September 30, 2022, there is no clarity on the closure of the deal given the litigation involving Amazon.

After a series of defaults by Future Retail even after a one-time debt restructuring package was approved by lenders, Bank of India last week filed an insolvency petition against the company at the National Company Law Tribunal to recover dues.

Separately, CNBC-TV28 has also learnt that if no reassurance is given on debt recovery, lenders are also mulling moving the Debt Recovery Tribunal (DRT) to invoke guarantees on loans given to Future Retail, as they have rights over the company’s stocks and moveable fixed assets as secured creditors.

Future Retail is understood to have a debt of over Rs 17,000 crores owed to a consortium of banks including Bank of India, State Bank of India, Axis Bank, Bank of Baroda and others.

CNBC-TV18 reached out to Future Retail and Bank of India for their comments on the story, but no response was received.