Indian banks to start debt recovery dates against Future Retail -sources By Reuters


© Reuters. FILE PHOTO: People move past a closed Future Retail Big Bazaar retail store in Mumbai, March 2, 2022. REUTERS/Francis Mascarenhas/File Photo

By Nupur Anand and Abhirup Roy

MUMBAI (Reuters) -Indian lenders are set to initiate debt recovery proceedings against Future Retail this week to safeguard their interests after rival Reliance unexpectedly took over some of the retailer’s stores, two bankers told Reuters.

Future, hit by the pandemic, has been struggling to pay off its debt and is fighting a bitter legal battle with US retail giant Amazon (NASDAQ:). That battle has successfully blocked a $3.4 billion sale of its retail assets to India’s largest retailer Reliance, citing violation of certain contracts.

Future denies any wrongdoing. But Reliance Industries suddenly took control of hundreds of Future stores late last month, citing a non-payment of rent, after assuming many of the leases held by a cash-strapped future.

State-owned lender Bank of Baroda will be the first to take Future to the Debt Recovery Tribunal (DRT) and is expected to file the paperwork this week, the two bankers said.

“We are taking this step as a measure of last resort because we want to protect ourselves in this legal fiasco,” said one of the bankers directly involved in the matter. “Going to DRT will ensure that Reliance can’t pull another sudden move.”

Other lenders are likely to follow suit, the second banker with knowledge of the matter told Reuters.

Future Retail and BoB did not immediately respond to requests for comment.

Future Group as a whole has more than $4 billion in debt and lenders have already started classifying the loans as non-performing assets (NPA) this quarter.

Lenders are also likely to file a case in the National Company Law Tribunal (NCLT) that handles corporate insolvency cases, both bankers told Reuters. Future and Amazon are fighting it out at multiple levels, including at India’s Supreme Court.

Given the legal complexities in this case, approaching the DRT first is likely to help banks attach, seize and sell Future’s assets promptly, instead of going after the entire company at NCLT, Ketan Mukhija, a partner at Link Legal said.

“It is a very strategic, tactical call (by the banks),” he said.

($1 = 76.1910 Indian rupees)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any for loss or damage as a result of reliance on the information including data, quotes, liability and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link

Powered by BeaconSites