FEBRUARY 25, 2022
NEW DELHI: Several employees at Kishore Biyani-led Future Retail (FRL) stores, including Big Bazaar, have started receiving offer letters from Reliance Retail, asking them to join the subsidiary of the oil-to-telecom conglomerate.
The move, which comes amidst a lengthy legal battle with Amazon, is seen as a “hostile takeover” bid by Mukesh Ambani’s Reliance Industries that is keen to take grab a large chunk of the retail and e-commerce market.
The development could include replacement of Big Bazaar signages and branding from these stores with those of Reliance, senior executives close to the development told TOI. This means Reliance will operate these stores without Big Bazaar branding.
Unable to repay dues to landlords, FRL stores were taken over by Reliance and then sublet to the Biyani-run entity for operations under its brands. In addition, a majority of inventory at these stores were being supplied by Reliance Jiomart as a cash-strapped FRL could not clear dues to existing suppliers.
Emails sent to a Reliance Retail and FRL spokespersons on Friday evening remained unanswered at the time of going to press.
FRL has received letters from Reliance Projects and Property Management Services asking it to vacate several stores for not making payments. While some of these stores remained shut, notices on entryways read “Stock Taking in progress—store will remain closed”. TOI has reviewed the letters and the notices.
The development comes even as FRL and Amazon remain entangled in legal battles over the former’s proposed sale of assets to Reliance for around Rs 25,000 crore.
Amazon and FRL are embroiled in a 18-month long dispute with cases pending before the Supreme Court, Delhi High Court, Singapore International Arbitration Centre (SIAC) and NCLAT. FRL is also staring at insolvency because it failed to pay loan dues of Rs 3,500 crore to its creditors on December 31. FRL, which counts the State Bank of India (SBI) and Bank of India (BOI) among its biggest lenders, owes Rs 9,119 crore for interest and principal repayments up to March 2022.
In 2019, Amazon had acquired 49% in FCPL, an unlisted Future Group entity, for Rs 1,500 crore. Since FCPL held around 10% in FRL, the e-tailer claimed it gave it rights over the latter. Subsequently, when the Future-Reliance deal was announced, Amazon dragged FRL to a Singapore arbitration court for alleged violation of contracts.
Courtesy/Source: TOI
