Future Retail wants Rs 3,500 crore long-term loan from Amazon to ride out crisis
New Delhi: Future Retail (FRL), promoted by Kishore Biyani, has applied for a long-term loan of Rs 3,500 crore from Amazon by January 24 since the US online retail giant objected to the sale of its small-format stores. Proceeds from this sale would have been used to repay FRL lenders and avoid default.
“Given that you object to the sale of small format sales, the proceeds of which were to be used to repay lenders and thereby avoid NPA classification, please confirm that you are ready to finance this amount by Monday (January 24 ) through an unsecured loan. , long-term loan, subordinated to existing FRL lenders or other mutually appropriate and legally acceptable structure,” according to HEY which cited communication from three independent FRL directors to Amazon on Friday.
“If you do, FRL will use those funds to repay existing FRL lenders. Alternatively, you are also free to engage with lenders, so that we do not fall foul of our OTR (one-time restructuring) process or obligations.
The letter mentions that the FRL urgently needs funds to repay its lenders.
It should be mentioned here that FRL, which runs the Big Bazaar hypermarket chain, is required to pay its lenders by January 29 to avoid its debt being classified as non-performing assets (NPA).
Earlier this week, the Jeff Bezos-controlled online retailer warned FRL not to sell its chain of 800 small-format stores that operate under the Easyday and Heritage Fresh brands without Amazon’s approval.
The American online sales titan had mentioned a potential agreement between Samara Capital and FRL as a solution to get out of the crisis. Both Samara and FRL had signed a non-binding term sheet pact for the pumping of Rs 7,000 crore into FRL. This however happened in July 2020 before the announcement of the deal with Reliance Retail.
For the past two years, FRL and Amazon have been embroiled in a legal dispute after the US-based company blocked Future Group from completing a Rs 24,731 crore sale to Reliance Retail under a deal struck in August 2020.