Fighting Amazon for retail deal, India’s Future says it looks at insolvency and hits bank loans
By Aditya Kalra and Abhirup Roy
NEW DELHI (Reuters) – If India’s Future Group cannot sell its assets, $ 4 billion in bank loans and bonds will be at risk, pushing its retail unit into insolvency, said Wednesday the company in a lawsuit against Amazon.com Inc, which wants to block the sale.
A New Delhi court on Tuesday blocked the sale of retail assets by Future Group to Reliance Industries after Amazon raised objections to the deal.
The corporate battle has involved sprawling companies run by two of the world’s richest men: Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani.
Amazon had argued that Future broke contracts by selling retail assets to Reliance. The court sided with the American company, saying an earlier order from an arbitrator who suspended the Future-Reliance deal was valid.
Future – who had argued that the arbitrator’s order was not binding – on Wednesday filed an appeal against the court ruling, saying the company’s creditors would face a “significant risk” if the deal with Reliance failed.
In addition to the roughly 300 billion rupees ($ 4.1 billion) affected by bank loans and bonds, the failure of the agreement would also impact the livelihoods of 50,000 employees and 6,000 small and small. middle sellers, he said.
“It is inevitable that FRL (Future Retail) will go into liquidation… The extent of the damage that can be done to the general public is unimaginable,” Future said in the court brief, seen by Reuters.
The appeal is due to be heard Thursday before a larger panel of two judges in New Delhi.
Future, India’s second-largest retailer with more than 1,700 stores, and Amazon did not respond to a request for comment.
Future Retail shares fell 5% in early trading on Wednesday. Reliance Industries fell as much as 1.2%, but recovered later.
The Delhi court on Tuesday asked Indian authorities to maintain the status quo on the transaction, putting the Future-Reliance deal on hold.
India’s stock exchanges and the country’s antitrust watchdog had previously cleared the deal, though it is awaiting court approval.
Future, in his appeal, said Tuesday’s Delhi court order had “made stillborn” the approvals.
Amazon’s “sole and pure intention” was to prevent Reliance – which is also venturing into e-commerce – from acquiring the assets of Future, the Indian company argued in the case.
Amazon, which intended to own some of Future’s retail assets itself, argued that a 2019 deal it had with a unit of Future contained clauses banning the Indian group from them. sell to anyone on a “restricted” list, including Reliance. .
(Reporting by Aditya Kalra in New Delhi and Abhirup Roy in Mumbai; Editing by Sanjeev Miglani, Stephen Coates and Gerry Doyle)