Future Retail misses repayment under restructuring deal.
- ByStartupStory | January 3, 2022
Amid the ongoing tussle with Amazon, Future Ltd. has missed the repayment obligation of ₹3,494.56 crore due on or before 31 December. The company mentioned in its regulatory filings that Care Ratings have downgraded the company to default grade after the missed repayment. Future Retail’s non-convertible debentures, long-term bank facilities and short-term bank facilities has been downgraded to Care D.
The company said in a statement, “We refer to the obligation on the company to pay an aggregate amount of ₹3,494.56 crore as defined in the one-time restructuring (OTR) plan to various consortium banks and lenders, who are parties to the agreement under OTR plan, on or before 31 December 2021,”
The lenders of the company include Central Bank of India, State Bank of India, Indian Bank, Bank of Baroda, Union Bank of India, IDBI Bank and Axis Bank. Collectively, Future retail owes the banks Rs 6,278 cr. Future Retail said that it will be co-operating for completing the monetization of the specified business within the next 30 days as per directions of banks to resolve the issue.
According to RBI’s regulatory framework, after the review period of 30 days to repay lenders, if the default status remains, it will be declared as non-performing. Provisions would have to be made as if the recast never occurred, and it will force banks to declare tha account as ‘doubtful’.
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