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Creditors file Rs 21,000 crore claim against Future Retail

Future Retail has received claims from 33 financial creditors for a total of ₹21,057 crore, according to data released by the company, that is under the corporate insolvency resolution process (CIRP). It has also received claims from operational creditors to the tune of ₹265 crore; other creditors’ claims at ₹112 crore and employee claims at ₹9 crore.

Of the total claims received so far, ₹17,511.69 crore has been verified by the interim resolution professional (IRP), and claims worth ₹3,546 crore have not yet been verified, according to the company.

Who claimed what
Bank of New York Mellon has claimed ₹4,669 crore, of which ₹4,109 crore has been verified. This gives the US-based bank 23 per cent voting rights. State-owned lenders, including State Bank of India, Union Bank of India, Bank of Baroda, Central Bank of India, Indian Bank, Punjab National Bank, UCO Bank and Indian Overseas Bank, among others have claimed over ₹12,755 crore. That amount is almost 60 per cent of the claims Future Retail has received from financial creditors.

Private sector banks including Axis Bank, IndusInd Bank, IDFC First Bank and YES Bank, too, have claimed ₹464.46 crore, ₹357.67 crore, ₹220.55 crore and ₹148.70 crore, respectively. Axis Trustee Services Limited, too, has claimed monies, but that has not been verified. Similarly, claims from UCO Bank, IDFC First Bank and APAC Financial Services Pvt Ltd have not been verified so far.

Besides this, the IRP has also received claims from other creditors, operational creditors and employees for monies to the tune of ₹112 crore, ₹265 crore and ₹9 crore, respectively. The IRP has also recorded claims from four other creditors, 121 operational creditors and over 460 employees so far. However, the IRP is yet to verify these.

The backstory
In June, the Mumbai bench of the National Company Law Tribunal (NCLT) admitted the petition moved by Bank of India under Section 7 of the Insolvency and Bankruptcy Code (IBC). It then started proceedings against Future Retail and appointed an IRP in the matter. Bank of India had moved the insolvency petition against Future Retail on April 14 for its dues not being paid.

In August 2021, Future Retail entered into an agreement to sell its assets to Reliance Retail for ₹24,713 crore. Amazon, which had invested ₹1,400 crore in one of the Future Group companies in 2019, had opposed the deal. It had dragged Future Group’s companies into arbitration on grounds that it violated an agreement in which Reliance was a restricted party.

After the e-commerce giant won an interim award in its favour, it moved Indian courts to seek enforcement of the award. This was countered by the Future Group. Since then multiple cases have been filed in different courts by both sides. These cases may be withdrawn now since the deal in question itself is in jeopardy.

In August 2021, since Future Retail’s stock prices had taken a hit, it was facing a liquidity crisis, and its deal with Reliance was stuck, it had approached its lenders to restructure its debt. However, recently Future Retail said the deal would not go through because the company’s secured creditors had voted against it. The Hindu Business Line

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