Bank Of India Drags Future Retail To NCLT, Files Insolvency Plea For Loan Default
- ByStartupStory | April 15, 2022
At the National Company Law Tribunal, the Bank of India (BoI) has filed a petition to initiate bankruptcy proceedings against debt-ridden Future Retail, which also operates Big Bazaar outlets (NCLT). Future Retail Ltd (FRL) has missed the deadline for repaying lenders INR 5,322.32 crore due to continuing lawsuits with ecommerce giant Amazon and other associated concerns, the company announced earlier this month. It had missed an earlier deadline to pay the banks INR 3,494.56 Cr on December 31, 2021.
In a regulatory filing, Future Retail stated, “The Bank of India (Bol) has served an advance intimation of filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the company for default on non-payment of monies due in terms of the Framework Agreement entered into between the company and BoI for default on non-payment of monies due in terms of the Framework Agreement entered into between the company and BoI for default on non-payment of monies due in terms of the Framework Future Retail has received a copy of the petition and is “seeking legal counsel,” according to the company.
Bol, the principal banker of Future Retail’s consortium of lenders, has claimed its charge over the firm’s assets through a public notice in newspapers in March 2022. The bank also cautioned the public against dealing with the Kishore Biyani-led Future group’s assets.
In accordance with the RBI circular of August 6, 2020, which announced a resolution structure for COVID-related stress, several Future Group firms, including FRL, have entered into agreements with their respective lenders. Future Group said in August 2020 that it would sell 19 companies in the retail, wholesale, logistics, and warehousing industries to Reliance Retail Ventures Ltd for a total of Rs 24,713 crore (RRVL).
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