Future Retail has told the Bombay Stock Exchange and the National Stock Exchange that Amazon has sought damages worth Rs 1,431 crore, along with interest for the Future Retail-Reliance Retail deal as an alternative to its appeal against the deal. Future Retail has said that interest is the amount invested by Amazon into Future Coupons, the promoter entity of Future Retail.
Future Retail further told the stock exchanges that should this claim be approved by the Singapore International Arbitration Centre or any other judicial forum, the promoters of Future Retail will be able to pay the amount and there would not be any financial impact on the company.
This disclosure came as Future Retail wrote to the stock exchanges urging them to allow its deal with Reliance Retail and to disregard the SIAC’s interim order that directs Future Retail to put the deal with Reliance on hold.
Last week, the SIAC passed an interim order asking Future Retail to put its deal with Reliance Retail on hold after Amazon filed a lawsuit against Future Group alleging that the deal violated its terms of contract with Future Group.
In August 2019, Amazon bought a 49% stake in Future Coupons, the unlisted promoter entity of Future Retail, giving it an indirect stake of around 7% in Future Retail.
Future Retail has said that the Singapore arbitrator's order does not restrict the markets regulator SEBI or the exchanges from considering and approving the deal.
The company also told the exchanges that Reliance Retail is the only rescue route for the company, which is in deep financial trouble.
"The proposed scheme is the only way, it can come out of the situation; scheme is in the best interest of all stakeholders, that includes shareholders, financial institutions, vendors and suppliers, and more importantly employees, etc," it said.
Reliance Retail, in August this year, signed a deal with Future Group to buy its retail, wholesale and logistics business by way of a slump sale for Rs 24,713 crore.
Future Retail said in the letter that the Singapore arbitrator's order accepted Amazon's contention that two separate shareholder agreements, one between Amazon and FRL's promoters (to which FRL is not a party) and another between FRL and its promoter (to which Amazon is not a party) come under one single integrated transaction and that by such a composite transaction, Amazon has an interest in and rights against FRL.
"This contention raised by Amazon is entirely misconceived," Future Retail wrote.
At best, Amazon's claims are a contractual dispute between Amazon and the promoters of FRL, it said, adding that Amazon has already initiated arbitration for the same.
The company has asked SEBI and the stock exchanges should consider the scheme independently on its merits, and as per SEBI regulations.
According to the company, the Singapore arbitrator's order does not restrict the SEBI or the stock exchanges in any manner from considering and approving the scheme, and hence asked them to issue a no-objection letter allowing the deal to be filed before the National Company Law Tribunal.