Future Retail urged the stock exchanges BSE and NSE on Sunday to allow its deal with Reliance Retail to go through. This comes days after Amazon wrote to the market regulators and stock markets in India asking them not to approve the Future-Reliance deal.
In the letter, Future Retail Ltd (FRL) said that Amazon has sought damages amounting to Rs 14,310 crore, along with interest. This interest, Future Retail says is the amount invested by Amazon into Future Coupons. It further added that should this claim be approved, the promoters would be able to pay this amount, and that there would not be any financial impact on the company.
FRL also told the exchanges that it is in deep financial trouble and the deal with Reliance Retail is the only rescue route for the debt-laden company.
Last Sunday, the Singapore International Arbitration Centre (SIAC) passed an interim order asking Future Retail to put its deal with Reliance Retail on hold. In its letter, Future Retail has argued that the Singapore arbitrator's order does not restrict SEBI or the exchanges from considering the scheme and approving the scheme.
Future Retail Ltd (FRL) has said that the 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," FRL said in its letter.
In August 2019, Amazon bought a 49% stake in Future Coupons, the unlisted promoter entity of Future Retail. This deal gave Amazon an indirect stake of around 7% in Future Retail.
Future said that, at best, Amazon's claims are a contractual dispute between Amazon and the promoters of FRL, and Amazon has already initiated arbitration for the same. Future said that 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.
FRL also told the exchanges that it is in deep financial trouble and the deal with Reliance Retail is the only rescue route for the debt-laden company.
Reliance Retail, in August this year, agreed to buy Future Group’s retail, wholesale and logistics business by way of a slump sale for Rs 24,713 crore.
In its letter, Future Retail told NSE and BSE that it is undergoing serious financial difficulties, particularly in light of the unprecedented impact of the Covid pandemic.
"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.
Future Retail further said that any delay in the implementation of scheme will cause irreparable losses to all stakeholders.
With IANS inputs