New Delhi, January 22 (IANS) Independent directors of Future Retail have asked e-commerce giant Amazon whether it is ready to pay Rs 3,500 crore to repay the retail company’s lenders.
Notably, this question to Amazon was posted after the e-commerce giant objected to the sale of smaller format stores of Future Retail Ltd (FRL) in a letter to independent directors.
“FRL urgently needs cash to repay its lenders. FRL is required to pay Rs 3,500 crore to its lenders by January 29, failing which it will be classified as NPA.”
“Since you are objecting to the sale of the short format sale, the proceeds of which were to be used to repay the lenders and thus avoid NPA classification, please confirm that you are in an unsecured, long-term medium by Monday. The loan is subject to the existing lenders of FRL or any other mutually appropriate and legally acceptable structure.”
Further, the letter to the e-commerce giant states, “If you do so, FRL will use such funds to repay the existing lenders of FRL. Alternatively, you are also free to engage with lenders so that we do not miss out on our OTR process or obligations.”
Accordingly, the independent directors asked the e-commerce giant to provide confirmation for such funds by January 22, 2022.
“Once you have provided these confirmations in writing and have agreed to invest Rs 3,500 crore to repay the lenders of FRL by January 29, 2022, we will need to assess a detailed proposal and agree to Amazon India. It would be a pleasure to meet Abhijeet Muzumdar, the head of the company.”
In addition, the letter asked Amazon, “Coming to specific aspects of your proposal – we note that your letter refers to a potential transaction between Samara Capital and FRL as a ‘solution’.”
“In this regard, you are requested to confirm whether Amazon can act on behalf of Samara Capital and has the authority to finalize and negotiate such transactions on its behalf.”
It asked Amazon to confirm the structure for the proposed transaction, and Samara Capital’s manager is owned and controlled by resident Indians.
“As you know, FRL is in multi-brand retail and FDI is prohibited in this sector. You are also aware that Amazon’s transactions in Future Coupons have resulted in regulatory investigations, including inquiries by the Competition Commission of India as well as the Enforcement Directorate.”
“It is therefore important that any investment being offered is in compliance with all applicable laws, including FDI laws, CCI regulations and SEBI regulations, and that no such transaction should undergo further regulatory scrutiny.”
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