ET had reported that lenders were close to finalising a restructing plan in its April 15 edition. Future Group has promised to pay banks an aggregate of Rs 6900 crore in two tranches by the end of the fiscal mainly by selling its small format stores. The restructuring will help the group buy time and keep an alternative ready even as it awaits a judicial clearance to complete the sale of its business to Mukesh Ambani‘s Reliance Retail, ET had said.
Future Retail is the largest debtor in the group with about Rs 10,000 crore of outstanding dues. Together with two other listed companies namely
Future Enterprises which holds its supply chain; and Future Lifestyle Fashions which houses apparel brands like Central and Brand Factory are the total of the group stands at about Rs 21,000 crore. Restructuring proposals for the other two companies are also expected to be cleared by lenders next week.
Future Retail’s restructuring plan also includes the debt raised through the non-convertible debentures (NCDs) issued by the company besides bank loans. However, the 5.6% US dollar bonds issued by the company and NCDs issued to certain trusts are not part of the resolution plan.
A total of 28 lenders led by Bank of India and also including foreign banks are part of the loan restructuring plan, Future Retail said. The has to be approved by the Kamath committee by April 26.
The plan for Future Retail includes repayment of short term loans, term loans, NCDs, overdue working capital loans which will converted into term loans) to be extended upto a maximum of 2 years.
Lenders have also agreed on a interest moratorium between March 1, 2020 to September 30, 2021, confirming ET’s story.
“Interest during the period shall be converted into Funded Interest Term Loan (“FITL”) which shall be payable by December 2021. Cash credit to be continued at reduced level based on bank assessment,” Future Retail said.
As part of the plan lenders have agreed to waive off all penal interest and charges, default premiums, processing fees unpaid since March, 2020 to the date of the implementation of the plan which is likely to be the date that Kamath committee approves the plan.
Redemption of NCDs has been rescheduled from fiscal 2023 to 2024 in four separate equal installements and also a part to be redemeed 100% onf June 1, 2025.
Rate of interest on NCDs would continue at same rate as was agreed at the time of allotment. Interest upto June 2021 on a series of NCDs would be converted into a term loan carrying an interest rate of 8.30% per annum.