“Since you are objecting to the sale of small-format sales, the proceeds of which were to be used to repay lenders and thereby avoid NPA classification, please confirm that you are willing to fund this amount by Monday (January 24) through an unsecured, long-term loan, subordinated to FRL’s existing lenders or any other mutually suitable and legally acceptable structure,” three independent directors of FRL wrote to Amazon on Friday. “If you do so, FRL will use such funds in order to repay FRL’s existing lenders. Alternatively, you are also free to engage with the lenders, so that we do not fall foul of our OTR (one-time restructuring) process or obligations.” The letter has been reviewed by ET.
“FRL is in need for cash infusion urgently, in order to repay its lenders,” they said.
Have Sought Fund Infusion Details
“FRL is required to pay its lenders Rs 3,500 crore by January 29, 2022, failing which it will be classified as an NPA, ” the directors wrote in the letter.
Amazon, embroiled in a legal tussle with Future over plans to sell its assets to Reliance Retail, earlier this week opposed FRL’s plans to sell its 800 small-format Easyday and Heritage stores to raise money to pay lenders to avoid defaulting on loan repayments.
The directors were responding to Amazon’s letter on Wednesday in which the US ecommerce giant had offered to help FRL address its capital crunch.
Amazon did not respond to an email seeking comment on the Friday letter.
The US company had repeatedly said in court hearings that it had lined up Samara Capital to infuse funding into the cash-strapped FRL before Future Group in August 2020 opted to sell its assets on a slump sale basis to Reliance Retail for Rs 25,000 crore.