Future Retail moves SC against lenders’ insolvency notice, seeks more time

Future, in a new court filing at the Supreme Court on Tuesday, asked judges to order its lenders and the country's central bank to grant more time to execute the sale, and not be classified as a defaulter.

Time is running out for Future Retail as the Kishore Biyani-promoted retail firm has filed a plea in the Supreme Court seeking an extension on the January 29 deadline to repay Rs 3,500 crore debt installment to lenders.

FUTURE'S RACE AGAINST TIMEFuture, which is India's second-largest retailer, has since 2020 failed to complete USD 3.4 billion retail asset sale to a rival due to a row with Amazon, which argues the group violated certain non-compete contractual terms the two sides had. Future denies any wrongdoing, as per a Reuters report.Future informed Indian stock exchanges in January it was unable to pay 35 billion rupees (USD 470 million) it owed to its lenders on December 31 as it could not sell certain small stores due to the dispute with Amazon. It had hoped to use a 30-day grace period to resolve the situation.After failing to do so, Future, in a new court filing at the Supreme Court on Tuesday, asked judges to order its lenders and the country's central bank to grant more time to execute the sale, and not be classified as a defaulter.LATEST LEGAL CHALLENGEThe latest legal challenge by Future signals growing distress at the retail group, which has said it fears liquidation and more than 27,000 job losses at its retail arm if its plan to sell assets to rival Reliance Industries fails.Future's filing also contained a letter from the State Bank of India (SBI) to the company on January 15, warning the company that if it doesn't pay the amount due to lenders, it could face legal action.This, SBI warned in its letter, could include "initiating insolvency proceedings" against Future, in line with Indian laws.Future's main retail arm, Future Retail, asked judges to quash such default notices from its lenders, its filing showed.

PECULIAR POSITIONFuture "finds itself in a peculiar position where it wishes to comply" with its obligations to lenders, but "the litigation with Amazon is effectively preventing it from doing so," Future's counsel Yugandhara Pawar Jha said in the filing.Amazon has argued that Future violated the terms of a 2019 deal the pair signed when the US firm invested USD 200 million in a Future unit. The US company's position has so far been backed by a Singapore arbitrator and Indian courts.Future has 1,700 outlets across the country. These include roughly 900 small-sized stores, with the rest being large-format hypermarkets and fashion outlets.

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