Future Retail on Monday made an interest payment worth $14 million to its investors. The Kishore Biyani-led company paid interest on 5.6% senior secured USD notes due 2025. The payment was done for $500-million senior secured notes listed in Singapore. The company failed to pay $14 million of interest due July 22 on its 5.6% 2025 dollar notes and is in a 30-day grace period that expires Friday. If payment were not made within the grace period, it would have been constituted as default making it the first by an Indian company on dollar security since March.
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The company said in a stock exchange filing, "In furtherance to our letter dated 22nd July 2020, wherein we had informed about the grace period of 30 days for making payment of interest on above USD Notes. Today, we are pleased to inform that the Company has made the payment of said interest for the half-year ended for an amount of USD 14 million on above USD Notes. We thank you all the investors and USD Notes holders for their continued confidence in us."
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The company's cash crunch has been heightened by the Covid-19 pandemic and lockdown, which was the world’s biggest. Its distress are indicative of more widespread challenges that Indian businesses face as the economy is anticipated to contract for the first time in four decades. While a crisis in the debt market has eased after RBI provided incentives, the creditworthiness of many borrowers remains strained. Last week, Bloomberg reported that Future Retail is in discussions with lenders led by State Bank of India to raise cash to help pay the interest on the dollar security, but the banks had declined to commit to the financing.
