Banks in India act against Future Retail for missing payments (updated)

Future Enterprises

03/02/2022 07:39

(Adds details, quote)
    By Aditya Kalra and Abhirup Roy
    MUMBAI, Feb 3 (Reuters) - Lenders to India's Future Retail
 FRTL.NS  have started classifying loans to the retailer as a
"non-performing asset" after the company missed payments to the
banks, they told the country's Supreme Court in a filing seen by
Reuters.
    The lenders also said they would be required by law to
provision 80 billion-90 billion Indian rupees ($1.07
billion-$1.2 billion) in their books on account of the default
by the country's second-largest retailer.
    "Lenders have already classified/begun classifying the loan
account of FRL as a non-performing asset ("NPA") since the
payment was not made within" the stipulated time, they said in
the filing, reviewed by Reuters.
    Future declined to comment.
    Being classified as an NPA will raise financial troubles for
Future, which has for months tried to sell its retail assets to
rival Reliance Industries  RELI.NS , but failed to do so because
of legal challenges from its partner Amazon.com Inc.
    Citing its dispute with Amazon, Future last month challenged
its lenders in the top court to avoid facing insolvency
proceedings or being classified as a defaulter, after it missed
making certain payments on its loans.
    Future has failed to complete its $3.4 billion retail asset
sale as Amazon has successfully argued before legal forums that
the Indian retail giant violated certain non-compete contractual
terms the two sides had. Future denies any wrongdoing.
    Future has told Indian stock exchanges it was unable to pay
35 billion rupees ($470 million) it owed to its lenders on Dec.
31 as it could not sell certain small stores amid the row with
Amazon. It had hoped to use a 30-day grace period to resolve the
situation, but was not able to do so.

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EXPLAINER-Amazon's long-running legal battle with India's Future
Group    https://reut.rs/3nHvlsU
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 (Reporting by Aditya Kalra and Abhirup Roy; Editing by Sam
Holmes and Gerry Doyle)
 ((abhirup.roy@thomsonreuters.com; + 91 22 6180 7067; Reuters
Messaging: abhirup.roy.thomsonreuters.com@reuters.net))