Future Retail Faces Liquidation Amid Buyer Search Failure

Future Retail, once a standout entity in the Future Group under Kishore Biyani’s leadership, is now on the brink of liquidation. The failure to secure a suitable buyer for the debt-laden firm has led to this decisive move.

Unsuccessful Resolution Plan

After multiple extensions in the deadline for the corporate insolvency resolution process (CIRP), the Committee of Creditors (CoC) rejected the sole resolution plan presented by Space Mantra Private. This rejection prompted the Resolution Professional (RP) of Future Retail (FRL) to approach the National Company Law Tribunal (NCLT) seeking liquidation.

Rejection of Bid and Extensions

Despite efforts, Space Mantra’s bid of Rs 550 crore for FRL did not garner the necessary votes in the CoC’s e-voting process. The NCLT had granted four extensions to complete the CIRP, with the final deadline being September 30, 2023, beyond which no further extensions were granted.

Insolvency Proceedings and Legal Framework

The insolvency proceedings against FRL commenced on July 20, 2022, under the Insolvency & Bankruptcy Code (IBC). The Code stipulates a 330-day timeline for completing CIRP, including litigation periods. The original 180-day period can be extended once by 90 days, making the maximum period 330 days.

Challenges and Attempts

FRL received six bids by May 15, 2023, the deadline for submitting resolution plans. Despite lenders revising Expressions of Interest (EoIs) and dividing assets into clusters to attract buyers, the search for a viable resolution plan remained elusive.

Financial Overview and Retail Presence

With debts amounting to approximately Rs 30,000 crore, Future Retail operates various retail formats, including Big Bazaar, Easyday, and Foodhall, across numerous cities. The company, once part of the Future group slated for transfer to Reliance Retail, saw its acquisition plans thwarted amid legal disputes involving Amazon.

Despite its extensive retail presence and past success, Future Retail’s current predicament underscores the challenges faced in securing a resolution amidst complex legal and financial landscapes.