Reliance Retail to make bid for insolvent Future Retail

24 Apr 2023 , 03:04 PM

JC Flowers and Reliance Retail are among applicants for buying insolvent Future Retail Ltd. There are a total of 48 applicants who want to submit their resolution plan for Future Retail Ltd. Under the Insolvency and Bankruptcy Code, entities may submit their resolution plan to the creditors of the insolvent entity. Creditors then accept the resolution plan of the entity that is offering the maximum payment against the dues that the insolvent entity owes to the creditors. Once the resolution plan is accepted and the entity that has submitted the plan makes the payments to the creditors, the ownership of the insolvent entity is transferred to the applicant entity. 

The entire resolution plan must be completed within 330 days from the date the insolvency court initiates the insolvency resolution process against the insolvent entity. In this case this time period has already passed. Creditors have therefore taken a 90-day extension. Under Insolvency and Bankruptcy Code, the insolvency court can give an extension of up to 90 days over the 330 days stipulated. 

Reliance Retail in 2020 had proposed to acquire Future Retail for $3.4 billion. But this proposition was rejected by the majority of secured creditors of the company, then. Amazon which held a significant stake in Future Retail had also obstructed this acquisition deal.