NewDelhi: The deal between Reliance Industries and Future Group is now over never and it will no longer see the light of the day. Reliance today informed that the deal worth Rs. 24713 crore with Future Group cannot go ahead. The company has said that the group’s secured credits have voted against it. This means that the Rs 24713 crore deal between Reliance’s retail units to buy Future Group’s Future Retail has been rejected.
Reliance has given this information in a regulatory filing. According to the Mukesh Ambani-owned company, Future Group’s Future Retail and other listed companies had proposed to their shareholders and creditors to seal the deal. However this proposal was rejected.
Read more: Reliance-Future deal in danger: 69% of lenders rejected while FRL shareholders voted in favour
Don’t agree on Reliance’s plan
As on Friday, the secured creditors of Future Retail Limited voted against the deal, following which Reliance on Saturday backed out of the deal. Creditors, which had given loans to Future Group, rejected the Rs 24,730 crore deal between Reliance Industries and Future Retail Asset. In this meeting, a public sector bank official had said that all the creditors had voted against the arrangement scheme put up by Reliance.
Deal canceled
The Future Group-related companies held two separate meetings this week to seek the approval of shareholders and lenders on the deal between Reliance and Future. After the meeting on Friday, Future Group had informed that shareholders and unsecured lenders have accepted the deal, but secured creditors have rejected the plan. After this, Reliance Industries canceled the deal saying that now this deal cannot be done.
The deal was done in August 2020
In August 2020, Future Group had announced a merger agreement of Rs 24,713 crore with Reliance Retail Ventures Limited (RRVL), a Reliance Group company. Under this agreement, Reliance Retail was to acquire 19 Future Group companies operating in the retail, wholesale, logistics and warehousing segments.
What is the controversy over this deal?
In the year 2019, Amazon bought 49% stake in Future Coupons (the holding company of Future Group) for Rs 1500 crore. Under this deal, Amazon also got the right to buy a stake in Future Retail within 3 to 10 years. But in 2020, Future Group announced the sale of its retail, wholesale and logistics business to Reliance Retail for Rs 24,713 crore. Since then this controversy started.
Amazon had turned to SIAC
Amazon had approached the Singapore International Arbitration Center (SIAC) objecting to the Future-Reliance deal. Amazon had said that the deal between Reliance and Future Retail is against the deal between it and Future Coupons. After this, the matter is going on from the High Court to the Supreme Court and the National Company Law Tribunal (NCLT).
CCI suspends Amazon-Future coupon deal
Recently, the Competition Commission of India (CCI) suspended this deal with Amazon’s Future Coupons. The Competition Commission had also imposed a fine of Rs 202 crore on Amazon for hiding information during the deal. The CCI had said in the order, “Amazon concealed the true purpose of the deal and made false and false statements to the agreement, therefore the deal will have to be looked at afresh.”
Now today when Mukesh Ambani calls off the deal then BigBazar owner Kishore Biyani’s statement given in the Supreme court turned out to be true where he said that for 1400 crore rupees Amazon has destroyed Rs.26000 crore company.
Read more: India talks tough to UK for economic fugitive Mallya & Nirav’s extradition
