Reliance Retail said on Saturday it would not proceed with its plan to buy Future Group’s business after the Kishore Biyani-led company’s secured lenders voted against the deal.
“In view of these results, shareholders and unsecured creditors of FRL voted in favor of the scheme. But the FRL’s secured creditors voted against the project. In view of this, the scheme of arrangement in question cannot be implemented,” Reliance said in a filing.
A majority of secured creditors on Friday voted against the resolution needed to approve Future Group’s Rs 24,713 crore plan to sell most of its retail and logistics business to Reliance Retail.
No less than 82.75% of Future Lifestyle’s secured creditors voted against the scheme. As many as 81.91% of shareholders voted for, as did 93.93% of unsecured creditors.
In Future Retail, 69.29% of secured creditors voted against the resolution, 85.94% of shareholders voted in favor of the merger plan while 69.29% of secured creditors voted against the resolution, and 78.22 % of Future Retail unsecured creditors voted in favor of the scheme.
In Future Supply Chains, 81.63% of secured creditors voted in favor of the device.
In Future Consumer, none of the company’s secured creditors voted in favor of the resolution, 99.86% of shareholders voted in favor of the merger plan and 77.4% of Future Consumer’s unsecured creditors voted in favor plan.
At Future Enterprises, 100% of shareholders voted in favor of the program. No less than 100% of secured creditors voted against the regime and 62.7% of unsecured creditors voted for it.
The vote came after an order from the National Company Law Tribunal (NCLT) on February 28 following a Supreme Court order, which allowed Future Group a meeting of shareholders and creditors to seek approval from the sale to Reliance Retail for approximately 24,713 crores.
Shareholders, secured and unsecured creditors of Future Group’s six listed companies voted on Tuesday and Wednesday. Bankers previously told ‘Business Standard’ that all major lenders had rejected the proposal.
Public sector lender Bank of India (BoI) has awarded Future Retail to NCLT for initiating resolution proceedings under the Insolvency and Bankruptcy Code.
BoI, the lead bank in Future Retail’s consortium of lenders, moved the NCLT in an attempt to settle the debt. The banks’ exposure is estimated at around Rs 17,000 crore.
According to documents filed by Future Retail on the exchanges, the BoI served advance notice of the filing of a 2016 IBC Section 7 claim against the company. This is a non-payment under the framework agreement between the two parties.
“We have received a copy of the petition and are in the process of taking legal advice,” FRL said in its exchange filing.
The application is expected to be brought before the Mumbai bench of the NCLT. No date has been given for this.
Earlier, Amazon had alleged that these shareholders and other meetings were against their previous deal with Future Group, which the latter said complied with the NCLT order.
Under the Rs 24,713 crore deal announced by Future Group in August 2020, Future Retail will sell 19 companies operating in the retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures.
In February, Reliance Group launched the takeover of 947 Future Group stores.