Print   Close

Future Retail averts default, pays $14 million interest on bonds

BusinessToday.In     August 24, 2020

Kishore Biyani-led Future Retail has managed to avert a default by making interest payment of $14 million (or about Rs 103.77 crore) to investors. The company made the payment on the last date of the 30-day grace period granted on the $500 million senior secured notes listed in Singapore.

The mid-cap company was originally scheduled to make the interest payment on its 5.60 per cent 2025 dollar notes on July 22, but it missed the deadline. The company was given 30-days grace period to honour interest payment.

"In furtherance to our letter dated July 22, 2020, wherein we had informed about the grace period of 30 days for making payment of interest on above USD Notes. Today, we are pleased to inform that the Company has made the payment of said interest for the half year ended for an amount of $14 million on above USD Notes," Future Retail said in a filing to the Bombay Stock Exchange on Monday.

"We thank you all the investors and USD Notes holders for their continued confidence in us," it added.

The non-payment of interest would have placed Future Retail in the 'default' category.

Also Read: Why Future Retail share price slipped 9% today

Weighed down by the development, shares of Future Retail closed day's trade at Rs 114.25 apiece, down 6.62 per cent, against the previous closing price of Rs 122.35 on the BSE. In the early trade, the stock declined as much as 8.79 per cent to Rs 111.60. The midcap share has fallen 70 per cent in one year and lost 66.43 per cent since the beginning of this year. However, in one month, the share has risen 20.55 per cent amid reports that the company is in talks with Mukesh Ambani's Reliance Industries to sell its flagship Future Retail to pay mounting debts. As of September 30, 2019, debt at Future Group's listed entities rose to Rs 12,778 crore from Rs 10,951 crore as on March 31, 2019.

Future Retail, which has been badly impacted by the COVID-19 lockdown, is being evaluated by Reliance Industries for an acquisition. As per reports, both the companies have reached an agreement regarding certain terms and conditions, and a deal worth Rs 24,000-27,000 crore could be signed soon. The deal will make RIL the number one player in brick-and-mortar retail space in India across categories such as fashion, groceries, and merchandise, and will lead to Biyani's exit from the retail business.

Also Read: Future Enterprises pushes board meet to decide sale to Aug 28

Meanwhile, Future Enterprises, the parent company of Future Retail, has postponed its board meeting to be held on August 22, by a week to August 28. The board was expected to discuss the merger of three group companies - Future Lifestyle, Future Supply Chain, and Future Retail - in the meeting.

By Chitranjan Kumar

URL for this article :
@ Copyright 2019 India Today Group.