SpaceMantra, the only bidder in the resolution plan for Future Retail (FRL), has revised its earlier bid to avoid liquidation of the bankrupt firm. “The new bid is substantially higher than the previous one, and the firm has requested the administrator and the Committee of Creditors (CoC) to relook at the whole process,” a source close to the development said. They did not divulge the bid amount.
SpaceMantra, which runs an online marketplace for the construction and interior industry, had offered about Rs 550 crore through an e-voting process that ended on September 30. Many lenders to FRL had termed it a fair price, as it was close to the value of Rs 450 crore arrived at by independent valuers, sources had told FE earlier. The company was looking at acquiring FRL to expand its retail and B2C presence.
However, FRL’s CoC rejected the bid after it failed to get the requisite number of votes through the e-voting process. Bank of New York Mellon has the highest voting share of 21.18% in the CoC, followed by Union Bank of India at 9.17% and Bank of Baroda at 8.95%.
“A decision on the new bid is expected soon,” sources said, adding that this was to avoid liquidation of the firm.
Under the Corporate Insolvency Resolution Process, the next stage after a bid is rejected would be liquidation of the firm, as there are no other bidders. This would mean selling the firm at “scrap” value. On October 10 last year, FRL’s resolution professional had sought initiation of its liquidation proceedings, after SpaceMantra’s plan was rejected.
In December, US-based technology consulting company Palguntech moved the Mumbai bench of the National Company Law Tribunal (NCLT), seeking a stay on FRL’s liquidation process. The firm had also sought “critical information” on FRL to enable it to place a bid for the company.
Palguntech had sought details of the inventory lying in the 835 stores of which Reliance group had taken possession after terminating their lease agreements. It said details of this inventory and its valuation were missing from the data site.
The NCLT had asked the parties to maintain the status quo.
According to legal sources, the tribunal has completed the hearing and is expected to pronounce the verdict “any time now”.