*Future Group Approaches Banks For Debt Restructuring*
The Kishore Biyani-led Future Group is looking to restructure Rs 7,500 crore in bank loans as various parts of the business face stress. The strains were visible even before the local spread of Covid-19 disrupted businesses across many sectors, including organised retail.
According to the people quoted above, the group is looking to extend the repayment schedule on Rs 7,500 crore in loans by five years. The group is currently working on a formal resolution plan, which will be submitted to lenders soon. The consortium of lenders to the group is led by State Bank of India.
*The consortium of lenders to the group is led by State Bank of India*.
Future Group, which owns one of India’s largest retail store chains, will also be looking at some operational restructuring as part of the plan. According to the first of the three people quoted above, Future Group will consider cutting down the size of some of its retail outlets, where footfalls have been lower
In April, Fitch Ratings downgraded the group’s flagship company Future Retail Ltd (FRL) to B- from BB, citing liquidity concerns after a recent drop in the company’s share price. The drop in share prices had prompted lenders to promoter entity Future Corporate Resources Pvt Ltd (FCRPL) to seek more Future Retail shares as collateral, Fitch noted. The rating agency also said that it is placing theflagship company on rating watch.
“Nearly all of FCRPL 41.1 percent stake in FRL has been pledged to lenders and certain lenders are attempting to invoke pledges on shares that amount to an 8 percent stake in FRL following a breach of the collateral coverage requirement,” Fitch said in a note on April 2.