RIL set to acquire Future Retail

Shares of Future Retail jumped almost 5% on Monday after a report cited that oil-to-telecoms conglomerate Reliance Industries (RIL) is close to acquiring Future Group’s retail unit.
Billionaire Mukesh Ambani-controlled RIL take-over of Future Retail’s the retail, supply-chain and related businesses will put a full stop on the retail business of Kishore Biyani.
The move apparently designed to become number one player in the brick-and-mortar space in India.
Reliance and Future have ironed out their differences over certain terms and conditions and a deal will be announced soon, the media report said citing unconfirmed source.

At present, the process of negotiation includes what role Biyani would play after the transaction.
Companies in which RIL pick up a minority stake, the founder-promoters continue to run the show, with the oil-to-telecom-to retail conglomerate occupying board seats, and not otherwise.
Future Retail is grappling with cash crunch after it defaulted on a Rs 100-crore ($14-million) repayment on its $500-million foreign currency bonds last week. Promoters have 42% share in Future Retail.
Earlier this month, the Mumbai-based company said no decision has been taken by its board regarding Reliance or any talks with lenders about a deal.

Future Retail operates more than 1,500 stores in India and owns several supermarket brands, including budget department and grocery chain Big Bazaar.
Biyani has been pushed to search for a buyer amid reports of rising debt, declining valuation of its listed firms and huge drop earnings due to the Covid-19 pandemic. The market value of its listed companies fell 74 per cent to Rs 10,464 crore in one year and its debt has jumped to Rs 12,000 crore. Also, Future companies did not repay banks debts nearly four months ago.

Biyani has been pushed to search for a buyer amid reports of rising debt, declining valuation of its listed firms and huge drop earnings due to the Covid-19 pandemic. The market value of its listed companies fell 74 per cent to Rs 10,464 crore in one year and its debt has jumped to Rs 12,000 crore. Also, Future companies did not repay banks debts nearly four months ago.

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