NEW DELHI :
Reliance Industries Ltd., on Saturday informed the exchanges that its scheme of arrangement involving the sale of retail and wholesale business of Future Group to its subsidiaries cannot be implemented, a day after majority of secured creditors of Future Group voted against the deal.
In an intimation to the exchanges, RIL said that Future Group companies comprising Future Retail Limited (FRL) and other listed companies involved in the scheme have intimated the results of the voting on the scheme of arrangement by their shareholders and creditors at their respective meetings. “As per these results, the shareholders and unsecured creditors of FRL have voted in favour of the scheme. But the secured creditors of FRL have voted against the scheme. In view thereof, the subject scheme of arrangement cannot be implemented,” the company said in its filing.
The vote has proved to be a setback to Reliance Retail Ventures Limited’s (RRVL), a subsidiary of RIL, nearly two-year bid to acquire the retail and wholesale business and the logistics and warehousing business of Future Group for Rs24,713 crore.
On Friday, Future Retail failed to secure the necessary 75% approval from secured creditors to proceed with the deal with RIL. While more than 75% of shareholders and unsecured creditors voted in favour of the deal, secured creditors showed their disapproval with 69.29% voting against the plan and 30.71% in favour, according to a regulatory filing by Future Retail Ltd (FRL). In terms of unsecured creditors, 78.22% voted in favour of the deal and 21.78% against. Besides, 85.94% shareholders of the company voted for the deal while 14.06% voted against, Mint reported.
Future Retail’s lenders include Union Bank of India, Bank of India, Bank of Baroda, State Bank of India, Indian Bank, Central Bank, Axis Bank and IDBI Bank.
In August 2020, Reliance Retail agreed to buy Future Group’s retail, wholesale, logistics and warehousing assets on a slump sale basis for Rs24,713 crore. The deal has however faced various hurdles including Amazon’s objection to the sale of Future Group’s assets to RIL.
On 28 February, the Mumbai bench of the National Company Law Tribunal (NCLT) allowed Future Retail to convene shareholder and creditor meetings on the proposed deal with Reliance Retail.
Future Group owes its lenders more than ₹27,000 crore.