A majority of secured creditors of Future Retail Ltd (FRL) have rejected the Rs 24,713-crore deal between the Kishore Biyani-led retail major and billionaire Mukesh Ambani’s Reliance Retail, according to a regulatory filing.
While more than 75 per cent of shareholders and unsecured creditors supported the deal, FRL did not get the requisite 75 per cent favourable voting from secured creditors. A majority of 69.29 per cent of secured creditors of FRL voted against the resolution while 30.71 per cent voted in favour of it, FRL said in a regulatory filing.
While 85.94 per cent of shareholders have voted in favour of the deal with Reliance, 14.06 per cent of shareholders opposed it.The company managed to get the requisite approval of 75 per cent from unsecured creditors with 78.22 per cent of them supporting the deal while 21.78 per cent voting against the resolution.
Secured creditors are granted security from a company through either a legal fixed or floating charge over the business’ assets and get preference over unsecured creditors in payment of dues by a company. Another group firm Future Lifestyle Fashion Ltd (FLFL) said that a majority of its secured creditors have voted against the deal.
FLFL’s 82.75 per cent secured creditors voted against the deal while 17.25 per cent supported it. Similarly, 81.91 per cent of shareholders supported the deal and 18.09 per cent opposed it.
Several listed Future group companies had called meetings of their shareholders, secured and unsecured creditors this week to get the approval of the scheme of amalgamation and sale of assets as per the deal announced with Reliance Retail.
In August 2020, the Future Group announced the Rs 24,713 crore deal to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL).
RRVL is the holding company of all the retail companies under the billionaire Mukesh Ambani-led RIL Group.
The deal was opposed by global e-Commerce major Amazon alleging that the deal violated its 2019 agreement through which it acquired a 49 per cent stake in FCPL, the promoter entity of FRL, for about Rs 1,500 crore.