The future of a big retail brand like Big Bazaar has been hanging in the balance for about two. And a half years and now it is not clear what will happen next. Because the Future-Reliance Deal to beautify its future cannot be complete now. After almost two and a half years of dragging the case, the Future-Reliance Deal may not be complete now. With the secured creditors of Future Retail voting against this deal, it is no longer possible to make it happen.
Reliance said – it is not possible now
According to the Reuters news of Reuters, Reliance Industries said in a regulatory (Big Bazaar) update on Saturday. ‘Unsecured creditors and shareholders of Future Retail have voted in favour of this deal. But with the company’s secured creditors voting against the deal, ‘this deal cannot be complete now’.
69.29% of creditors rejected the deal
Future Retail had updated on Friday that it has completed the voting process. To get the approval of shareholders and creditors on this deal. In the category of secured creditors, 30.71% votes were cast in favour (Big Bazaar) of this deal. While 69.29% have opposed it. At the same time, 85.94% votes were cast in favour of the deal and 14.06% against in the category of shareholders. While 78.22% of unsecured creditors favoured it, 21.78% were against it.
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Should have equal to 75% of the votes
Secured creditors are very important for a company. As they get priority over unsecure creditors in terms of payment when the assets of the company are about to be sold. In such a situation, according (Big Bazaar) to the rule, to complete this deal, the company needed 51% votes in favour of all the creditors present in the meeting. But the value of the loan given by these 51% creditors to the company should be equal to 75% of the total debt. Local banks account for 80% of the company’s total debt.
Long-running dispute with Amazon
Reliance had signed a deal worth Rs 24,713 crore to buy Future Group’s retail business. In August 2020 to strengthen its hold in the country’s retail sector. But in this case, the e-commerce company Amazon has implicated (Big Bazaar) a legal issue. After this, the matter went from future of big bazaar the Arbitration Court of Singapore. To the Competition Commission and the country’s highest court. But the result could not come out.
After this, Reliance recently started taking also over the lease document of the company’s Big Bazaar and other stores in the name of mortgage. The controversy regarding this also deal did not stop here. In a related matter, the National Company Law Tribunal (NCLT) on February 28, 2022, ordered Future Group to seek the approval of it shareholders and creditors on the deal. After this the group called a meeting for this, which Amazon called ‘illegal’.
Now NCLT will decide
After deciding against the creditors’ deal, Future Retail will now face insolvency proceedings at NCLT. Last week, the state-run bank of India, which gave loan to the company, filed a petition in the NCLT to initiate insolvency proceedings against the company.