Amazon Seeking Control Over Future Group's ₹30,000 Cr Assets Through an Investment of Just ₹1,431 Cr

• In August last year, Amazon had acquired a 49% stake in Future Coupons, the promoter entity of Future Retail, for Rs 1,431 Cr.
• Earlier also Amazon had stalled the sale of Future Group’s businesses to Reliance Retail through the Singapore International Arbitration Centre.

E-commerce giant Amazon is seemingly seeking 100% control of Future Retail Limited through an investment of just Rs 1,431 Crore. Future Group’s assets, including retail and wholesale trade, logistics and warehousing, and FMCG outsourcing businesses, are worth in excess of Rs 30,000 Crore.

This makes the battle between Amazon and Future Retail Ltd more fierce. In August last year, Amazon had acquired a 49% stake in Future Coupons, the promoter entity of Future Retail. The deal also gave Amazon a 3.58% stake in Future Group as Future coupon owns 7.3% share in the company.

It is noteworthy that earlier also Amazon has written to the SEBI, BSE, and NSE, asking them to take into consideration the Singapore arbitrator’s interim judgment that has put on hold the Rs 24,713-crore deal between Future group and Mukesh Ambani’s Reliance Industries Ltd.

This delay in the proposed deal between Reliance and Future Group could turn the latter’s loans into non-performing assets (NPAs). e

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Banks and financial institutions have exposure in excess of Rs 16,000 crore towards unpaid debts from Future Group's accounts. Suppliers and vendors also have exposure in excess of Rs 11,000 crore towards unpaid bills from Future Group's accounts.

The retail business of Future Group has been seeing huge losses even before lockdown owing to lesser sales/revenues. After the commencement of lockdown in March-2020, the situation became worse.

This resulted in Future Group defaulting in payment of approximately Rs 10,000 crore plus to financial institutions and lenders, vendors and suppliers, and to landlords in respect of unpaid borrowings, bills, and lease rentals, respectively.

According to sources, it is said that this was also made known to Amazon. Amazon also engaged in discussions with Future Group, however, could not come up with any viable option to avert the crisis.

Future Retail is India’s 2nd largest retail chain after Reliance Retail and has more than 1500 stores across 437 Indian cities and towns covering an area of 16 million square feet.

It employs around 50,000 people and is the parent of brands like Big Bazaar, Fashion Big Bazaar, HomeTown, Food Bazaar, and others. 

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