The Supreme Court on Thursday said it will hear on Monday (January 31) the Future Retail’s (FRL) petition seeking protection against being declared defaulter by its 26 lenders for failing to pay loan dues of Rs 3,495 crore to them.
A bench led by Chief Justice NV Ramana, while agreeing to hear Future Retail’s plea on Monday, insisted on hearing Amazon’s side as well, though senior counsel Mukul Rohtagi said that the e-commerce firm had nothing to do with this fresh petition.
While FRL moved the SC against its 26 lenders and RBI for issuing default notices, it formally rejected Amazon’s offer of financial support, saying its asset valuation at Rs 7,000 crore is much lower than that offered by Reliance Industries.
Amazon is already opposing the sale of FRL’s assets, which include more than 1200 Big Bazar stores across the country, to Reliance Retail.
FRL told the SC that despite being aware of the impact of the Covid-19 pandemic on its business/stores and also the freeze on the sale of its small-format stores due to its ongoing dispute with Amazon, the lenders have sent default notices to it earlier this month.
The Indian retailer apprehends that apart from its account being declared as a non-performing asset (NPA), the lenders would also publish its and its board of directors names as wilful defaulters, thereby reducing its credit rating and consequently compromising its ability to raise any further finance. Under the declaration of NPA by any of its 26 lenders, its account would stand classified as NPA by other lenders as well and would also adversely affect its other group companies which have availed the one-time restructuring (OTR) facility, told the apex court.
FRL had missed the due date for payment of Rs 3,494.56 crore to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon, impacting its monetisation plans. The company had last year entered into a one-time restructuring scheme for Covid-19 hit companies with a consortium of banks and lenders and was to discharge ”an aggregate amount of Rs 3,494.56 crore” on or before December 31, 2021.