Reliance Retail has taken steps to end the sub-lease of 947 Future Group’s stores and is proposing to reopen them after reconciliation of inventory and stock positions and rebranding. Post this, the stores are expected to be renamed.
Future Retail (FRL) said on Wednesday it is determined to get back the hundreds of stores acquired by the Reliance Group, claiming Reliance’s “drastic and unilateral action” came as a surprise.
In a regulatory filing, FRL said the board has strongly objected to such action by Reliance Group and has asked it to reconsider all other actions initiated in recent days. The board of directors of FRL has also notified Reliance Group that assets such as shop fittings, shop infrastructure, merchandise, inventory, etc., belonging to FRL and located in these shops, are being pledged as security for the benefit of the FRL. FRL lenders. The board has called on Reliance Group to ensure that possession of the secured assets is not transferred and is kept unharmed for the benefit of the lenders.
FRL said after Reliance Retail’s merger announcement last August, it had been unable to raise capital and failed to make some repayments to lenders. Subsequently, several landlords had issued notices of termination and filed lawsuits to recover their dues and also to evict FRL. In order to keep the company afloat and protect the interests of all shareholders, Reliance had entered into new leases with these landlords and sublet them to FRL on leave and license.
Reliance Retail has taken steps to end the sub-lease of 947 Future Group’s stores and is proposing to reopen them after reconciliation of inventory and stock positions and rebranding. Post this, the stores are expected to be renamed.
The Emergency Arbitrator (EA) of the Singapore International Arbitration Center had prevented FRL from going ahead with the merger of Rs 24,713 crore with Reliance Retail. Amazon, which is in the midst of a legal battle with FRL over the transfer of assets to Reliance Retail in an agreement reached in August last year, said in a public statement Tuesday that any attempt by FRL and its promoters to transfer or to dispose off assets would be contrary to the orders of the SIAC’s order. In early March, the SC had asked Amazon and FRL to try to reach an out-of-court settlement, but the talks proved inconclusive.
Concerned about the transfer of stores, lenders moved to FRL Tuesday to protect their loans. Although no decision has been made yet, it is believed that banks are considering going the route of the Debt Recovery Tribunal (DRT) rather than opting for a CIRP (Corporate Insolvency Resolution Plan). In Wednesday’s letter to the exchanges, FRL wrote that it has notified the Reliance Group that assets such as retail infrastructure, fixtures and inventory are assumed as collateral in favor of the FRL lenders. It said it had asked Reliance Group to ensure these are not transferred.
Amazon on Wednesday asked the Supreme Court to ban Reliance Retail from opening a new store in place of FRL’s Big Bazar.
This post ‘Trust campaign was one-sided’: Future Retail says store acquisition came as a surprise
was original published at “https://www.financialexpress.com/industry/reliance-action-was-unilateral-future-retail-says-stores-takeover-came-as-a-surprise/2463321/”
