Amazon's demand for $200 mln sank settlement talks with India's Future-sources

Future Enterprises

15/03/2022 15:10

(Adds detail, background)
    By Aditya Kalra
    NEW DELHI, March 15 (Reuters) - Dispute settlement talks
between Amazon.com Inc  AMZN.O  and India's Future Retail
 FRTL.NS  failed over the U.S. group's demand for the return of
at least $200 million it had invested in the Indian firm, two
sources told Reuters. 
    Amazon has for months blocked the $3.4 billion sale of
Future's retail assets to rival Reliance, announced in 2020,
citing a breach of certain contracts. Future denied any
wrongdoing, and hopes had risen recently of an out-of-court
settlement after Amazon and Future agreed to talks.
    On Tuesday, the two sides told India's Supreme Court, which
is hearing the dispute, the talks had collapsed, and Amazon took
out newspaper ads criticising both Reliance and Future.
 urn:newsml:reuters.com:*:nL2N2VI07B
    Two sources with direct knowledge of the settlement talks
told Reuters that Amazon representatives informed Future the
dispute could end if the U.S. company could get back at least
$200 million it invested in a Future unit in 2019 - the
transaction at the heart of ongoing legal disputes.
    Future instead offered a stake of an equivalent amount in
one of its remaining group companies after Reliance  RELI.NS 
takes over most of its retail assets, saying it was financially
distressed. But Amazon did not accept that, the sources said.
    Future and Amazon did not respond to emails seeking comment.
    One of the sources said there were more factors at play
during the talks, but Amazon's demand for the return of
investment was the "bare minimum" the U.S. company wanted.
    The settlement talks were triggered after Reliance, India's
biggest retailer, stunned Amazon when it began taking over key
Future Retail outlets on Feb. 25 with its staff suddenly showing
up at many of Future's biggest stores to assume control, in what
was seen as a de facto takeover.  urn:newsml:reuters.com:*:nL2N2V904L
    Earlier on Tuesday, Amazon ran large ads in leading Indian
newspapers headlined "PUBLIC NOTICE" and alleging actions taken
by Reliance and Future had been "done in a clandestine manner."
    Future, which has $4 billion in overall debt, has said it is
staring at insolvency if its deal to sell retail assets to
Reliance fails.

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 (Reporting by Aditya Kalra in New Delhi
Editing by Mark Potter)
 ((aditya.kalra@tr.com; +91-11-49548021; Twitter @adityakalra;))