Home FINANCE Future seeks ₹3.5k cr from Amazon to avoid default

Future seeks ₹3.5k cr from Amazon to avoid default

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NEW DELHI: In a letter to Amazon, the Kishore Biyani-promoted Future Retail (FRL) has asked the US ecommerce giant for Rs 3,500 crore by January 24 in order to repay its lenders and avoid default. FRL, which operates the Big Bazaar chain of hypermarket stores, is required to pay its lenders the sum by January 29, failing which it will be classified as a nonperforming asset (NPA). The company is set to default on the payment, said people in know of the matter.
The cash-strapped retailer, currently entangled in a bitter legal battle with Amazon over its proposed sale of assets to Reliance for Rs 25,000 crore, had missed the due date that was on or before December 31, 2021.
FRL’s letter to Amazon comes two days after the Jeff Bezos-led e-tailer in a letter warned FRL against selling its small-format stores that operate under the EasyDay and Heritage Fresh brands without its consent. FRL’s lenders were seeking to put these stores on the block to recover dues.

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In the letter dated January19, Amazon offered financial help, too. The e-tailer has alleged that FRL had signed a non-binding term sheet with private equity player Samara Capital, which entailed a Rs 7,000crore investment, before the announcement of the Future-Reliance deal. FRL, however, asked Amazon to confirm whether it can act on behalf of Samara and has the authority to negotiate and finalise such a transaction on its behalf.
“Your letter refers to a potential transaction between Samara Capital and FRL, as a ‘solution’,” FRL wrote in the letter dated January 21. “Please also confirm the structure for the proposed transaction, and that the management of Samara Capital is owned-and-controlled by resident Indians. As you know, FRL is in the multi-brand retail sector, and FDI in this sector is restricted. ”
Amazon and FRL did not comment on this story.

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