India court blocks Future Enterprises from selling stake in Generali JV (updated)

Future Enterprises

28/02/2022 14:44

(Adds details of court order, context)
    By Aditya Kalra and Abhirup Roy
    NEW DELHI, Feb 28 (Reuters) - An Indian court has blocked
Future Enterprises  FURE.NS  from selling its stake in its
general insurance joint venture business with Italy's Generali
 GASI.MI , following a legal challenge by a group representing
bondholders, two sources familiar with the matter told Reuters.
    The court's order is another setback for Future, which is
facing a mountain of debt and is in dire need of funds after
being hit hard by the coronavirus pandemic. It is struggling to
sell its retail assets due to an ongoing legal dispute with
estranged local partner Amazon.com Inc  AMZN.O .
    Future Enterprises said in January that it had decided to
sell its 25% stake in Future Generali India Insurance Company to
Generali for 12.52 billion rupees ($165.87 million).
    IDBI Trusteeship went to court representing foreign
bondholders who subscribed to Future Enterprises companies that
had defaulted. The bondholders had rights mandating Future
Enterprises not to dilute its Future Generali stake, one of the
sources said.
    After hearing IDBI, a Mumbai city civil court ordered Future
Enterprises to hold off from selling the stake until the next
hearing on March 10.
    A court order dated Feb. 25 showed that IDBI had shared its
concerns with Future before filing the lawsuit, but received no
response. The judge in Mumbai agreed with IDBI's plea to stop
the transaction, saying it was imposing a "restrain" on Future,
the order showed.
    Spokespersons for Future Enterprises, Future Generali
Insurance, Generali and IDBI Trusteeship did not immediately
respond to requests for comment. 
    Future had plans to use proceeds from the sale of its
insurance stakes to sustain its retail business and clear
liabilities of other group companies.  urn:newsml:reuters.com:*:nL1N2ST11R

 (Reporting by Aditya Kalra in New Delhi; editing by John
Stonestreet and Ed Osmond)
 ((aditya.kalra@tr.com; +91-11-49548021; Twitter @adityakalra;))