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Reliance calls off $3.4 billion retail deal with India's Future Group

Published 04/23/2022, 06:15 AM
Updated 04/23/2022, 07:10 AM
© Reuters. FILE PHOTO: People use an escalator as they exit a Future Group Big Bazaar retail store in Mumbai, India, November 25, 2020. REUTERS/Niharika Kulkarni/File Photo

By Aditya Kalra and Swati Bhat

MUMBAI (Reuters) -India's top retailer Reliance on Saturday called off its $3.4 billion deal with Future Group, saying it "cannot be implemented" after Future's secured creditors rejected it.

The deal was at the centre of legal battles since 2020 after Future's partner Amazon.com Inc (NASDAQ:AMZN) legally blocked it, citing violation of certain contracts. Future denied any wrongdoing.

In a stock exchange filing on Saturday, Reliance said the deal now cannot go through as "the secured creditors of FRL (Future Retail) have voted against" it.

Future Retail and Amazon did not immediately respond to a request for comment.

Future's secured lenders on Friday rejected the deal, and the company, once India's second-largest retailer with more than 1,500 outlets, now faces the prospect of a bankruptcy process.

Future's fall is "an unfortunate event", one of the sources with direct knowledge of the dispute said on Saturday.

Amazon had obtained legal injunctions that stalled Future's deal with Reliance, sparking a series of legal battles in various forums, including an arbitration panel in Singapore.

© Reuters. FILE PHOTO: People use an escalator as they exit a Future Group Big Bazaar retail store in Mumbai, India, November 25, 2020. REUTERS/Niharika Kulkarni/File Photo

In February, Reliance stunned the retail industry by suddenly seizing control of hundreds of Future stores, citing non-payment of rent, after assuming many of the leases held by cash-strapped Future.

That spooked bankers, some of whom have already initiated debt recovery proceedings against Future.

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