Creditors make claims of Rs 21000 crore against Future Retail

23 Aug 2022 , 09:14 AM

Data provided by the company that is undergoing the corporate bankruptcy resolution process shows that 33 financial creditors have made claims against Future Retail totaling Rs21,057 crore.

The interim resolution professional has certified that out of the total claims received, a number of Rs17,511.69 crore (IRP). According to the website of company, claims worth Rs3,546 crore have not yet been validated.

Bank of New York Mellon, a financial creditor with headquarters in the US, has asserted claims of Rs4,669 crore, of which Rs4,109 have been validated.

Over Rs12,755 crore has been claimed by State Bank of India, Union Bank of India, Bank of Baroda, Central Bank of India, Indian Bank, Punjab National Bank, UCO Bank, Indian Overseas Bank, and a few other state-owned lenders. This sum represents roughly 60% of the claims that financial creditors have made against Future Retail.

Axis Bank, IndusInd Bank, IDFC First Bank, and Yes Bank, private sector lenders, have asserted claims totaling Rs464.46 crore, Rs357.67 crore, Rs220.55 crore, and Rs148.70 crore, respectively.

Axis Trustee Services Ltd has asserted a claim of Rs1,266.28 crore, however, the total sum has not yet been validated. Operational creditors have also submitted claims totaling Rs265 crore to the company, although they have not yet been verified.

The IRP will establish the committee of creditors (CoC) after verifying the received claims, and after that, it will request expressions of interest (EoIs) from potential bidders for the company’s assets. After the EoIs are received, the resolution professional’s team will review them before presenting them to the CoC for approval. The resolution process must then be approved by a majority of the CoC in order for the highest proposal to be accepted.

The National Company Law Tribunal (NCLT) Mumbai bench last month accepted the Bank of India’s plea to initiate legal action against Future Retail pursuant to Section 7 of the Insolvency and Bankruptcy Code (IBC) and appointed an IRP to handle the case. On April 14, the Bank of India filed an insolvency petition against Future Retail due to the company’s unpaid debts.

In order to pay off its mounting debt, The Future Group agreed to sell both its unlisted and listed businesses to Reliance Retail in 2020 for a little over Rs25,000 crore. However, the world’s largest online retailer Amazon, which is 2019 purchased 49% of Future Coupons, a business that holds 10% of Future Retail, has accused Future Group of breaching a contract.

Reliance Industries recently stated in a regulatory filing that the deal with Future Retail would not go through because the secured creditors of the company had voted against it. Depending on what is up for sale, Reliance Retail may now consider purchasing the assets of Future Group, according to business insiders.