As the Committee of Creditors rejected the sole resolution plan submitted by Space Mantra, the RP of the company has now approached NCLT to initiate liquidation of Future Retail
New Delhi: Future Retail, once the crown jewel of Kishore Biyani-led Future Group, is now heading for liquidation as its lenders could not get any reasonable buyer of the debt-ridden firm.
As the Committee of Creditors (CoC) rejected the sole resolution plan submitted by Space Mantra after four extensions in the deadline to complete the corporate insolvency resolution process (CIRP), the RP of the company has now approached NCLT to initiate liquidation of Future Retail (FRL).
“The resolution plan submitted by Space Mantra Private has not been approved by CoC of FRL, kindly note that, the Resolution Professional (RP) has filed an application, before the National Company Law Tribunal, Mumbai Bench, for initiation of liquidation of FRL,” said a regulatory filing from FRL.
Last month FRL had informed that Rs 550 crore bid submitted by Space Mantra for FRL, failed to get the required number of votes in the e-voting process of the CoC.
The NCLT had granted four extensions to FRL for completion of CIRP and the last date was September 30, 2023, and after that there was no extension in the time frame.
The insolvency proceedings against FRL were started by the tribunal on July 20, 2022.
The Insolvency & Bankruptcy Code (IBC) mandates the completion of CIRP within 330 days, which includes time taken during litigations.
As per Section 12 (1) of the Code, the CIRP shall be completed within a period of 180 days from the date of initiation.
However, NCLT may grant a one-time extension of 90 days. The maximum time within which CIRP must be mandatorily completed, including any extension or litigation period, is 330 days.
Earlier, FRL had said it had received six bids from prospective buyers by May 15, which was the last date for submission of resolution plans.
The deadline for submission of resolution plans was May 15, 2023, for 48 companies, which were in the final list of ‘Eligible Prospective Resolution Applicants’.
This has happened despite FRL lenders coming with revised Expressions of Interest (EoIs) and inviting fresh bids after dividing its assets into clusters.
Future Retail has a debt of around Rs 30,000 crore and the company is going through CIRP.
On March 23, 2023, creditors of FRL invited new EoIs, whereby prospective buyers can bid for the debt-ridden firm “as a going concern or individual cluster or a combination of clusters of its assets”, as it failed to attract a resolution plan in more than four months.
FRL operated multiple retail formats in both the hypermarket supermarket and home segments under brands such as Big Bazaar, Easyday, and Foodhall. At its peak, FRL was operating more than 1,500 outlets in nearly 430 cities.
It was part of the 19 Future group companies operating in the retail, wholesale, logistic and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713-crore deal announced in August 2020.
However, lenders had rejected the takeover of the 19 Future group companies, including FRL, by Reliance amid a legal challenge by Amazon.