Amazon vs Reliance: Banks to start debt recovery proceedings against Future - Report
India Today
Future Retail has been struggling to pay off its debt and is fighting a bitter legal battle with US retail giant Amazon.
The corporate rivalry between Amazon and Reliance has taken a new turn as banks are set to initiate debt recovery proceedings against Future Retail, according to a Reuters report. This comes after rival Reliance unexpectedly took over some of the retailer's stores, the report said.
Future Retail has been struggling to pay off its debt and is fighting a bitter legal battle with US retail giant Amazon. That battle has successfully blocked a $3.4 billion sale of Future's retail assets to India's largest retailer Reliance, citing violation of certain contracts.
Future, however, has denied any wrongdoing. But Reliance Industries suddenly took control of hundreds of Future stores late last month, citing non-payment of rent, after assuming many of the leases held by cash-strapped Future, Reuters reported.
State-owned lender Bank of Baroda will be the first to take Future to the Debt Recovery Tribunal (DRT) and is expected to file the paperwork this week, the Reuters report says.
"We are taking this step as a measure of last resort because we want to protect ourselves in this legal fiasco. Going to DRT will ensure that Reliance can't pull another sudden move," Reuters quoted one of the bankers directly involved in the matter as saying.
Other lenders are likely to follow suit, the second banker with knowledge of the matter told Reuters.
Future Group as a whole has more than $4 billion in debt and lenders have already started classifying the loans as non-performing assets (NPA) this quarter.
