Amazon is involved in attempts to block the transaction for the sale of Future’s retail assets to Reliance. The Kishore Biyani-founded Bigbazaar company finds itself in a difficult financial position, as its value erode because of the uncertainty. The Physical retail outlets of the Future Group including Big Bazaar, Easyday, eZone and FoodHall had dipped in a gradual way prior to the lockdown.
The rating agency, Icra had downgraded a Future Group company (Future Corporation Resources) to junk status citing high levels of debt and pledged shares in the month of March. The COVID-19 pandemic outbreak gives a strong hit to the firm’s liquidity position. Future Group ended up pending on payments in excess of Rs10,000 crore to not only financial institutions and lenders but also vendors, suppliers and landlords in terms of unpaid borrowings, bills and lease rentals. Banks and financial institutions pending exceeds Rs18,000 crore towards unpaid debts and to suppliers and vendors, unpaid bills are pegged over Rs 7,500 crore, documents seen by a leading economic news agency.
Amazon has invested Rs 1,431 crore in August 2019 in an arm of the Future Group. Amazon through an emergency arbitrator in Singapore, has obtained a temporary stay on the transaction. However, Future Retail has moved to the Delhi High Court to stop Amazon in interfering in the approval process for the asset sale scheme. Future Retail Senior Counsel Harish Salve in the Delhi High court has said that interference by Amazon in the Future Retail-Reliance Retail deal may lead to job losses at the beleaguered firm and even bankruptcy.
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