Future Retail pays interest amounting to Rs 105 Crore on USD Notes hours before deadline

Future Retail paid $14 million or Rs 105 crore in interest dues to its coupon bond holders on Monday for $500 million secured notes, said a person aware of the matter.

Future Retail paid $14 million or Rs 105 crore in interest dues to its coupon bond holders on Monday for $500 million secured notes, said a person aware of the matter.

Future Retail has dodged a default by repaying its investors, hours ahead of the 30 days grace period whose deadline was ending today. The Kishore Biyani led company was originally due to make the interest payment on its 5.60% 2025 dollar notes on July 22 which it missed.

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“Due to the nation-wide lockdown imposed to restrict the spread of COVID-19 pandemic, and consequent restricted business operations of the Company the liquidity position has been affected causing us to miss the service of the payment of interest due on the USD Notes (listed on Singapore Stock Exchange) on 22nd July, 2020. The terms of issuance of the USD Notes provide for an additional period of 30 days for payment of interest from the due date, in case the same could not have been paid on the original due date,” the notice read.

Future Group had a consolidated debt of Rs 12,778 crore as of September 2019, as per the company’s public records. Its flagship company Future Retail had a gross debt of Rs 2,657 crore and net debt of Rs 6,456 crore as of March 2019.

“Whatever each bank in the consortium could do individually, we have all done,” said a senior executive from a bank with exposure to Future Group. “They (Future Group) have taken whatever loans were available under the COVID-19 Emergency Credit Line from a few public sector banks,” the source added.

Another senior executive said that the company is eligible under RBI’s August 6 Resolution Framework for COVID-19 Related Stress. Under this, its loans can be restructured and the repayment schedule extended by upto two years.

The stock closed at Rs 115.85, down by 5.3% on the NSE.

Future Group’s Future Retail has been acquired by Reliance Industries Ltd. Read here.