Responding to Amazon’s letter, FRL’s independent directors said they are willing to assess the comprehensive proposals and provide a solution for banks, employees, vendors and other stakeholders, and that any evaluation of the proposals is within the legal framework of FRL. be subject to obligations.
On January 19, Amazon wrote to independent directors of FRL, reiterating its willingness to assist the Mumbai-based company in addressing its financial concerns.
The independent directors said in their letter to Amazon on Friday that FRL is in urgent need of cash, and needs to be paid 3,500 crore by January 29, 2022, failing which it will be classified as an NPA (non-performing asset).
“Since you are objecting to the sale of a small format sale, the proceeds of which were to be used to repay the lenders and thereby avoid NPA classification, please confirm that you are in an unsecured channel by Monday (January 24) , long-term debt, subject to FRL’s existing lenders or any other mutually appropriate and legally acceptable structure.
“If you do so, FRL will use such funds to repay the existing lenders of FRL,” the letter, a copy of which was seen by PTI, said.
He added that Amazon is also free to engage with lenders so that FRL “does not violate our OTR process or obligations”.
He further asked Amazon to provide the confirmation sought by January 22, 2022, after which they are ready to assess a detailed proposal.
E-mails sent to Amazon and Future Group seeking comment on the matter did not elicit any response.
Earlier this month, Future Retail said it had missed the due date of payment of 3,494.56 crore to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon affecting its monetization plans.
In its January 19 letter, Amazon said that it has learned from certain media sources that FRL is proposing to sell its smaller format stores, which include ‘Easyday’ and ‘Heritage Fresh’ brands. It had emphasized that the sale of small format stores by the company without the consent of the US e-commerce giant would be in violation of the injunction.
It had also reiterated its desire to assist the cash-strapped retailer in addressing its financial concerns, and said: “We are committed to assisting FRL in addressing any financial concerns of FRL, within the framework of agreements including resolution.” We reiterate our willingness and capability to propose in the term sheet between Samara Capital, and FRL, in which the infusion of 7,000 crore in FRL.”
To this, the independent directors asked Amazon to confirm whether it can act on behalf of Samara Capital and that it has the authority to finalize and negotiate such transactions on its behalf.
“Amazon’s transactions in futures coupons have resulted in regulatory scrutiny, including inquiries by the Competition Commission of India, as well as the Enforcement Directorate.
The independent directors said, “It is therefore important that any investment being offered is in compliance with all applicable laws including FDI laws, CCI regulations and SEBI regulations, and any such transaction should not lead to further regulatory scrutiny.” “
He said that FRL has always acted in letter and spirit in compliance with the applicable laws and will continue to do so.
Future and Amazon have been locked in a bitter legal tussle after the American e-commerce giant Future Group was dragged to arbitration at the Singapore International Arbitration Center (SIAC) in October 2020. Amazon argued that FRL had violated their contract by entering into a deal. Billionaire Mukesh Ambani’s Sale Of Its Assets To Reliance Retail Based On Slowdown 24,713 crores.
Earlier this month, Future Retail said it had missed the due date of payment of 3,494.56 crore to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon affecting its monetization plans.
In December, the Competition Commission of India (CCI) suspended its 2019 approval for Amazon’s deal to acquire 49 per cent stake in FRL’s promoter Future Coupons Pvt Ltd (FCPL), while levying a fine. 202 crore on the e-commerce major.
The CCI order has been challenged by Amazon in the National Company Law Appellate Tribunal, which has issued notices to the Fair Trade Regulator and the FCPL.
The NCLAT has directed to list the matter for next hearing on February 2.
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