Even after an asset sale deal with Reliance Retail, Future Group’s debt woes are far from over, as banks have refused to extend fresh loans to the Kishore Biyani-led company. Future Group entities have defaulted on loans at least four times since August 29, when the Reliance deal was announced.

Reliance Retail, a subsidiary of Reliance Industries Ltd (RIL), is to buy Future Group’s retail and wholesale, and logistics and warehousing businesses for ₹24,713 crore. But the money is yet to reach the lenders as the deal has not been completed yet.

“Future Group thought the banks would start lending again... but that has not happened. The company is in discussions with banks to get fresh loans but it looks like it will happen only once the deal with Reliance gets regulatory approvals,” said a source. “Once Reliance gets Competition Commission of India (CCI) approval, it could pump in the funds.”

Biyani had sold the assets due to a massive cash crunch. The company managed to avoid defaults until August by using the Covid-induced moratorium on loan repayments. It has taken ₹170-crore loans under the Common Covid-19 Emergency Credit Line scheme from multiple banks since April. But after the moratorium ended on August 31, bank credit lines have dried up.

More defaults

Future Group firm Future Consumer Ltd has defaulted on payment of principal of ₹20 crore and interest of ₹2.03 crore. Another group firm, Rivaaz Trade Ventures, defaulted on debt obligation due on August 31. Future Enterprise is unable to service its commercial paper obligations, with principal of ₹90 crore, due on Sept 14. On Tuesday, Future Enterprises said it defaulted on interest payments of ₹15.86 crore for its NCDs.

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