As contributions are well past the 90-day deadline, over 20,000 crore in loans to Kishore Biyani’s Future Group may slip into a watch list or be classified as a non-performing asset (NPA).
Future Retail, home to the group’s main retail brands such as Big Bazaar, and Future Lifestyle Fashions are the two largest companies in debt, holding around 20,000 crore in loans.
The owner of the Big Bazaar, Brand Factory and Central sales formats is technically in default and with the Supreme Court moratorium no longer available, banks will have to mark the exhibition as a stressed loan on April 1, reports The Economic Times.
“A resolution plan is underway and banks have until April 26 to approve it. However, there is no status quo for classifying these loans as NPA. If the restructuring takes place, the banks may well write off the provisions, but by then the loans can be classified as NPAs, ”said a senior bank official.
“The restructuring is underway and the banks are working on the treatment of creditors and investors. Banks can take back the provisions they have built up if they classify these loans as NPA each time the plan receives approval from the Kamath committee, ”said a second bank executive.
Following the launch of JioMart last year, amid the forced lockdown of Covid-19, Reliance has taken the next big step forward by to acquire a Future Group lacking in liquidity.
As part of this agreement, the Future group sold its retail, wholesale, logistics and warehousing activities to the Reliance group.
Following the announcement, Amazon in October accused Future Group of violating an agreement with them. In 2019, Future Retail signed an agreement with Amazon in which the latter acquired a 49% stake in Future Coupons, the firm promoting Future Retail, for an agreement of nearly Rs 2000 crore.
Amazon opposed the deal and went to the Singapore Arbitration Tribunal, which said it should be suspended pending a final ruling.