With an investment of Rs 1,431 crore, Amazon is seemingly seeking to control 100 per cent of Future Retail Ltd (FRL) by controlling the entire Kishore Biyani Group’s majority equity, with the Future Group’s assets amounting to about Rs 30,000 crore.
The Future Group employs around 50,000 employees. Banks and financial institutions have an exposure in excess of Rs 18,000 crore towards unpaid debts from Future Group’s accounts. Suppliers and vendors will also have an exposure in excess of Rs 7,500 crore towards unpaid bills from Future Group’s accounts.
The COVID-19 pandemic left a mark on the physical retail of Future Group business as it suffered losses owing to lesser sales/revenues. Post the commencement of lockdown in March-2020, the situation worsened. 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. The COVID-19 slump also coerced the company to reduce and prolong payment of salaries and incentives to the employees, owing to dwindling finances.
Amazon engaged in discussions with Future group, but could not propose any viable solution to the problem. Future Group also engaged with Reliance Retail for potential partnerships, which were known to Amazon. Stock market regulator Securities and Exchange Board of India was reported to not become embroiled in the American company’s dispute with Future group over the sale of the latter’s assets to Reliance Retail, which grabbed eyeballs earlier this month.
