Amid a major legal battle between Kishore Biyani's Future Group and Jeff Bezos' Amazon, Reliance Industries Ltd has decided to provide operational support to the cash-strapped retail chain. The Rs 24,713 crore deal signed between Ambani and Biyani is still awaiting the National Company Law Tribunal approval. The law tribunal will hear the matter on March 15.
In the meantime, RIL subsidiary Reliance Retail has extended the internal deadline to secure regulatory approvals and complete the deal marred by legal cases by six more months, LiveMint reported. To make it easy for Future Retail to run operations amid these crises, some lease agreements that were scheduled to expire have been renewed in the name of Reliance Retail. The integration, including training of Future employees, has also started between the two companies. Besides, rebranding and soft-launch exercises are also going on in full scale, the daily reported.
Both Reliance Retail and Future Group have not come up with any official statement on this so far. Future Group owns about 1,500 Big Bazaar and fbb stores, employing about 70,000 people.The NCLT will likely pronounce its verdict on March 15. On February 22, the Supreme Court had put a pause on the RIL-FRL deal, also stopping the NCLT from giving its nod till further orders. The SC will also hear the matter on March 19. The Kishore Biyani group is struggling to repay about $2.5 billion in dues. Any more delay could put its future plans in jeopardy as regulatory disapproval could force Reliance to walk away from the deal.
In 2019, Amazon bought a 49 per cent stake in Future Coupons, with a right to buy into Future Retail in 3-5 years. Amazon received a blow in August 2020 when Future Group announced the sale of its retail, logistics, warehousing and wholesale business to Mukesh Ambani-led Reliance Retail for Rs 24,713 crore. Amazon later dragged Future Group to arbitration at the Singapore International Arbitration Centre against the deal, saying the Reliance-Future deal violated the Amazon-FRL pact and that it had the right of first refusal.
On October 25, SIAC passed an interim award in favour of Amazon, barring FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party. Amazon also approached the Delhi High Court, seeking the enforcement of an interim order of the emergency arbitrator at the SIAC.
On February 8, the Delhi High Court stayed the implementation of single-judge order to Future Retail Ltd and various statutory authorities to maintain the status quo regarding the deal. Amazon on February 12 moved the Supreme Court (SC) in a bid to block the deal. The scheme of arrangement had already received approval from the Competition Commission of India (CCI), with no objection from SEBI and bourses, following which it approached NCLT Mumbai on January 26, 2021.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today