Future Group Cos Tank Up to 20% As Reliance Deal Scraps Off, Nears Bankruptcy

  • Investing.com
  • Stock Market News
Future Group Cos Tank Up to 20% As Reliance Deal Scraps Off, Nears Bankruptcy
Credit: © Reuters.

By Malvika Gurung

Investing.com -- In a regulatory filing by the oil-to-telecom conglomerate Reliance Industries (NS: RELI ) on Saturday to stock exchanges, secured creditors of Future Retail (NS: FURE ) Ltd, primarily banks and financial institutions have rejected the proposal of RIL to acquire Future Group's assets in a Rs 24,713-crore deal.

The leading retailer FRL stated on Friday that while 86% of its shareholders voted for RIL’s acquisition of assets, 69% of its secured lenders voted against the sale agreement, and consequently, RIL has dropped the curtain on the acquisition plan.

Under the Rs 24,713 crore deal, RIL’s subsidiary Reliance Retail Ventures was going to acquire 19 of Future Group’s entities in retail, wholesale, logistics and warehousing segments.

Shares of Future group companies ended upto 20% lower on Monday, with

  • Future Retail ending 5% lower,
  • Future Enterprises (NS: FURE ) down 9.52%,
  • Future Consumer (BO: FTRE ) down 19.4%,
  • Future Lifestyle Fashions (NS: FLFL ) down 19.97%, and
  • Future Supply Chain Solutions (NS: FUTE ) down 19.94%.

The deal was announced in 2020 and led to the long-time legal tussle between Kishore Biyani-led Future Group and Amazon (NASDAQ: AMZN ), which was taken to the Supreme Court as well as an arbitration tribunal in Singapore.

Now that the deal with RIL has broken off, Future Group companies have inched closer to filing for bankruptcy, after the Bank of India (NS: BOI ) initiated insolvency proceedings against the debt-ridden FRL last week after the company defaulted on payments to lenders, stated news agencies.

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