New Delhi: Bank of India has moved the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against debt-ridden Future Retail Ltd.
Earlier this month, Future Retail Ltd (FRL) reported a default of Rs 5,322.32 crore to its lenders due to ongoing litigation with e-commerce major Amazon and other related issues.
“Bank of India (BoI) has given advance notice of filing of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Company for non-payment of dues in terms of the Framework Agreement entered into between the Company. and Bank of India,” FRL said in a regulatory filing.
The Future Group firm said it had received a copy of the petition and was in the “process of seeking legal advice”.
The principal banker of FRL’s consortium of lenders, BoI, through a public notice in newspapers last month claimed its allegation on the assets of FRL and warned the public to deal with the assets of the Kishore Biyani-led Future Group firm Was.
Several Future Group companies, including FRL, had entered into agreements with their respective lenders in terms of the RBI circular dated August 6, 2020, announcing a resolution framework for COVID-related stress.
The FRL is part of a Rs 24,713 crore deal announced by Future Group in August 2020 under which Reliance Retail Ventures Limited (RRVL) is to be sold to 19 companies operating in the retail, wholesale, logistics and warehousing segments.
All the 19 companies will be consolidated into a single entity, Future Enterprises Ltd, and will then be transferred to RRVL under the proposed deal.
Future Group companies will hold meetings of their respective shareholders and creditors between April 20-23, 2022 to seek their approval for the Rs 24,713 crore deal.
The deal has been opposed by Amazon and is under litigation in various forums including the Supreme Court, the Delhi High Court and the Singapore International Arbitration Centre.
Earlier this week, Amazon warned FRL against holding meetings of its shareholders and creditors to approve the sale of its retail assets to Reliance Retail.
In a 16-page letter dated April 12 to Kishor Biyani and other promoters, the US e-commerce giant said such meetings are illegal and would violate agreements not only of 2019 when Amazon invested in the promoter firm of FRL, but also Also violated the injunction of the Singapore Arbitral Tribunal. On sale of retail assets to Reliance.