Adani and Reliance are two contenders for future “scrap.”
Mukesh Ambani’s Reliance Group, Adani Group, Jindal Power and a host of scrap dealers are among the bidders for what remains of Kishore Biyani’s Future Retail, once the second-largest chain in the country.
One year after the Reliance Group took possession of 835 of Future’s retail stores, leaving the company with only a small portion of its distribution chain, the company said that 49 potential applicants had submitted expressions of interest under the insolvency process.
After taking possession of store locations in February 2022, Reliance has repositioned Future’s Big Bazaar outlets as Smart Bazaar. Besides some operating stores such as Central and Foodhall, most of Future Retail’s assets are furniture and fixtures, which is the reason for the interest from scrap dealers and asset reconstruction firms JC Flowers and Gordon Brothers.
The Reliance Group had agreed to buy Future Retail for Rs 24,713 crore, but it faced a series of litigation as Amazon, which had earlier invested in Future, objected to the deal.
The next stage would involve lenders inviting firm commitment from bidders when non-serious bidders will drop out.
Lenders have split the bidding into clusters. Bidders can bid for the whole company or specific clusters. Cluster I comprises of retail businesses in a particular zone. Cluster II has FRL’s holding in TNSI Retail, which owns the WH Smith Business and Welcome Retail, whereas Cluster III is the group’s Foodhall business. Cluster IV consists of inventory and fixed assets. All the residual assets of the company are part of Cluster V.
The resolution professional has admitted claims amounting to Rs 17,511 crore from 28 financial creditors, including foreign bond-holders, banks and domestic bond-holders. The highest admitted claim is for Rs 4,109 crore from overseas bond-holders.
Besides Reliance Retail Ventures and April Moon Retail, a part of the Adani Group, many scrap dealers and recyclers have shown interest. They include AR India Scrap Solutions, Abdulla H Shaikh Scrap Merchants, Earth Zone Recycling, Eco Globe E-waste recyclers, Green Valley Recycling, Hayat E-Recyclers, Royal Faiz Recycling, TH Scrap Traders, among others.
Bank of India initiated insolvency proceedings against Future Retail last year after the retailer failed to repay its debt and the proposal to sell Future Retail to Reliance Group was rejected by lenders. Reliance had managed to take possession of 835 stores as outstanding rentals had accumulated to Rs 4,800 crore.
