Future Retail lacks a restoration strategy; lenders will soon meet
Mumbai: Future Retail (FRL) has failed to receive any plan for its revival and the lenders of the Kishore Biyani-promoted company are expected to meet soon in order to decide the further course of action.
The last date for the submission of resolution plans for the company was February 20, but the resolution professional did not receive any proposals, FRL said in a stock exchange filing on Tuesday.
“The matter was put for consideration of the committee of creditors … Further course of action shall be decided by the committee of creditors,” the filing said. Meanwhile, the Mumbai bench of the National Company Law Tribunal (NCLT), comprising judicial member Kuldip Kumar Kareer and technical member Shyam Babu Gautam, posted the hearing for March 14, 2023.
Last year, on July 20, the Mumbai bench of the NCLT had admitted Bank of India’s petition to start the corporate insolvency resolution process against Future Retail and appointed Vijay Kumar Iyer as the resolution professional.
The state-owned lender filed the application after FRL defaulted on a ₹3,495-crore one-time restructuring scheme. Currently, the company has admitted claims of more than ₹19,185 crore.
“Lenders will have the option to either grant a further extension to a prospective resolution applicant to submit resolution plans or to file an application before the NCLT to seek liquidation of Future Retail,” said NPS Chawla, cofounder of law firm AEKOM Legal. “While recommending liquidation, lenders will also recommend the possibility of a scheme of compromise or arrangement or sale of the corporate debtor as a going concern under liquidation regulations.”
Ashish Pyasi, associate partner at law firm Dhir & Dhir Associates, also said the lenders in this case can extend the timeline for submission of resolution plans. “However, if no resolution plans are received, then the company will go into liquidation as the (Insolvency and Bankruptcy) Code provides that the company will go into liquidation if there is no resolution plan or the same is rejected,” said Pyasi.
Last year, over a dozen firms, including Reliance Retail Ventures, Bommidala Enterprises, Capri Global Holdings, Dharampal Satyapal, Nalwa Steel & Power and a consortium of Payard Investments and Gordon Brothers International had submitted expressions of interest. But none of them submitted a resolution plan.