Future Retail resolution professional moves NCLT to seek extension of insolvency deadline till Sept 15

As per Section 12(1) of the Code, CIRP shall be completed within a period of 180 days from the date of initiation.

The resolution professional (RP) of Future Retail Ltd has approached the National Company Law Tribunal (NCLT), seeking a further extension till September 15 to complete the corporate insolvency resolution process (CIRP) of the debt-ridden firm. The RP of the company has moved an application before the Mumbai bench of NCLT to exclude a period of 29 days from CIRP of Future Retail Ltd, according to a regulatory filing.

"The Resolution Professional of Future Retail Limited (FRL) has filed an application before National Company Law Tribunal, Mumbai seeking exclusion of a period of 29 days from CIRP of FRL, and consequent extension from August 17, 2023, to September 15, 2023, for concluding the CIRP of FRL," it said. If approved, this would be a third extension for FRL which, according to some reports, is struggling to attract a buyer despite changes in the bid conditions.

Last month, NCLT extended the deadline to August 17, 2023, after allowing the plea of FRL to exclude 33 days from the CIRP. In April, NCLT granted FRL an extension of 90 days till July 15, 2023, for concluding the CIRP. The Insolvency & Bankruptcy Code (IBC) mandates the completion of CIRP within 330 days, which includes time taken during litigations. CIRP was initiated against FRL by NCLT on July 20, 2022, following a loan default.

As per Section 12(1) of the Code, CIRP shall be completed within a period of 180 days from the date of initiation. However, NCLT may grant a one-time extension of 90 days. The maximum time within which CIRP must be completed, including any extension or litigation period, is 330 days. Earlier, FRL had said it had received six bids from prospective buyers by May 15, which was the last date for submission of resolution plans. The deadline for submission of resolution plans was May 15, 2023, for 48 companies, which were in the final list of 'Eligible Prospective Resolution Applicants'.

This has happened despite FRL lenders coming with revised Expressions of Interest (EoIs) and inviting fresh bids after dividing its assets into clusters. Future Retail has a debt of around Rs 30,000 crore and the company is going through CIRP. On March 23, 2023, creditors of FRL invited new EoIs whereby prospective buyers can bid for the debt-ridden firm "as a going concern or individual cluster or a combination of clusters of its assets", as it failed to attract a resolution plan in more than four months.

FRL operated multiple retail formats in both the hypermarket supermarket and home segments under brands such as Big Bazaar, Easyday, and Foodhall. At its peak, FRL was operating more than 1,500 outlets in nearly 430 cities. It was part of the 19 Future group companies operating in the retail, wholesale, logistic and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713-crore deal announced in August 2020. However, lenders had rejected the takeover of the 19 Future group companies, including FRL, by Reliance amid a legal challenge by Amazon.