Future group companies have received go-ahead from the National Company Law Tribunal to convene and conduct the meetings of their respective shareholders and creditors to seek their approval for Rs 24,713 crore deal with Reliance Retail.
The development comes almost three days after Reliance Industries Ltd took over the operations of at least 300 stores of Future Retail and has offered jobs to its employees after the Kishore Biyani-led group failed to make lease payments to landlords.
Passing an order, the Mumbai bench of the NCLT allowed Future Retail Ltd (FRL) and other Future Group entities to convene their meeting for seeking approval for the deal. While, NCLT has also dismissed the application of the e-commerce major Amazon opposing the scheme of merger, said FRL in a regulatory update.
The NCLT has today, in terms of the Supreme Court judgment dated February 15, 2022, passed an order allowing the company and other applicant companies to convene and conduct the meetings of its respective Shareholders and Creditors to seek their approval for the Scheme, said FRL. The order was pronounced in the open court and a "written copy of the said order is awaited," Kishore Biyani-led Future group firm said.
"The schedule of the meetings of Shareholders and Creditors will be intimated in due course of time," it added. Last week, FRL had said it proposed to conduct the meetings in the first half of April 2022 to take the consent from shareholders and creditors of the company.
FRL and other Future group companies had on November 8, 2021 filed an application seeking further direction for revised dates of meetings under the Composite Scheme of Arrangement between the Company, other Future Group Companies and Reliance entities. As part of the deal, Future Enterprises Limited is the transferee company to Reliance Retail.
Future Group's 19 companies operating in retail, wholesale, logistics and warehousing assets would be consolidated into one entity — FEL — and then transferred to Reliance. In August 2020, the loss-making retail giant proposed to sell its retail, wholesale and logistics arms that included businesses including Fashion at Big Bazaar, Koryo, Foodhall and Easyday to Reliance for Rs 24,713 crore.
However, the deal could not be closed as Future's warring partner Amazon went to courts citing violation of some contracts. Future group denies any wrongdoing. After the deal was stuck in a series of litigations and arbitrations, the long-stop date for the Scheme has already been extended by six months to 30th September 2022 by Reliance, FRL had informed last week.
This is the third extension of timeline by Reliance Retail Ventures Ltd (RRVL), the retail arm of Reliance Industries, for completing its Rs 24,713 crore deal with the Future group. Earlier, RRVL had extended the timeline from September 30, 2021 to March 31, 2022. The first long stop date was March 31, 2021, which was extended to September 30, 2021.
Long stop, an established practice in merger and acquisition transactions, is a timeframe in which parties agree on which all conditions precedent for a transaction need to be fulfilled.Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.