India's Future Group stocks plunge after Reliance deal falls through

Future Lifestyle Fashions

25/04/2022 06:13

BENGALURU, April 25 (Reuters) - Shares of Future Group
companies fell sharply on Monday, some as much as 20%, after
India's biggest retailer Reliance  RELI.NS  called off its $3.4
billion deal with the group over the weekend, pushing its
flagship Future Retail towards a possible bankruptcy process.
    Shares of Future Supply Chain Solutions  FUTE.NS , Future
Retail  FRTL.NS , Future Lifestyle Fashions  FLFL.NS , Future
Consumer  FTRE.NS  and Future Enterprises  FURE.NS  fell between
5% and 20%.
    With Reliance calling off the deal, Future, once one of
India's biggest retailers, now faces the prospect of a
bankruptcy process.  urn:newsml:reuters.com:*:nL4N2KE182
    "There is nothing much left for the company (Future Retail).
They don't have money, shops. Whatever Reliance has not taken
over yet have already been shut down. Future Retail is likely to
file for bankruptcy," said Deepak Shenoy, founder and chief
executive of Capitalmind in Bengaluru.
    Reliance said on Saturday the deal, at the centre of many
legal battles since 2020, "cannot be implemented" after Future's
secured creditors rejected it.  urn:newsml:reuters.com:*:nL1N2WL01G
    Future has been in a long-drawn legal battle with U.S.
e-commerce giant Amazon  AMZN.O  over the $3.4 billion sale of
its retail assets to rival Reliance Industries. Amazon had
obtained legal injunctions that stalled Future's deal with
Reliance, sparking a series of legal battles in various forums,
including an arbitration panel in Singapore.
    However, Reliance suddenly took control of hundreds of
Future stores in February, citing non-payment of rent, after
assuming many of the leases held by cash-strapped Future.
 urn:newsml:reuters.com:*:nL4N2V31V6

 (Reporting by Nallur Sethuraman in Bengaluru; Editing by
Shounak Dasgupta)
 ((Sethuraman.NR@thomsonreuters.com; (+91 8061822737); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))