India's Reliance to take over operation of 200 Future stores amid Amazon dispute-source

Future Enterprises

26/02/2022 08:53

By Aditya Kalra
    NEW DELHI, Feb 26 (Reuters) - India's top retailer,
Reliance, will take the operation of at least 200 stores of
Future Retail  FRTL.NS , which failed to make lease payments due
to Reliance, two people with direct knowledge of the matter told
Reuters on Saturday.
    Since 2020, Reliance has failed to close a $3.4 billion deal
to acquire the retail assets of Future, whose warring partner
Amazon.com Inc  AMZN.O  has successfully blocked the transaction
legally by citing violation of some contracts. Future denies any
wrongdoing.
    Future, Reliance and Amazon did not immediately respond to
requests for comment. 
    The takeover of stores by Reliance signals Future's
worsening financial situation as its retail assets sale remains
blocked due to legal battles. Future in January challenged its
lenders in India's Supreme Court to avoid facing insolvency
proceedings over missing bank payments, citing its dispute with
Amazon.  urn:newsml:reuters.com:*:nL1N2U50C9
    Future - which has more than 1,700 outlets, including the
popular Big Bazaar stories - has been unable to make lease
payments for some of its outlets. As a result, Reliance
transferred the leases of some stores to its name and sublet
them to Future to operate the stores, the sources said.
    As Future failed to make the payments, Reliance has decided
to run and rebrand about 200 outlets that would otherwise be
closed, they said.
    "Over 200 stores will transition to Reliance stores," said
one source, who asked not to be named as the details of the plan
are not public.
    In a letter seen by Reuters, Reliance offered Future
employees at these stores new jobs on the same terms. "We
welcome you to join our organization," it reads.
    Amazon has argued that Future violated the terms of a 2019
deal the companies signed when the U.S. giant invested $200
million in a Future unit. Amazon's position has been backed by a
Singapore arbitrator and Indian courts.

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Explainer: Long-running legal dispute between Amazon, India's
Future    https://reut.rs/3IoRS6h
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 (Reporting by Aditya Kalra in New Delhi; Editing by William
Mallard)
 ((aditya.kalra@tr.com; +91-11-49548021; Twitter @adityakalra;))