Kishore Biyani-backed Future Retail managed to avoid a default by making interest payment of $14 million to investors of its $500-million senior secured notes listed in Singapore. Monday was the last day for the cash-strapped retail company to make the payment.

Future Retail has been struggling to stay afloat for the past two years with Covid-19 adding to its owes.

Due to an acute cash crunch, the company had, last month, missed the first interest payment of ₹100 crore on its $500-million 5.6 per cent senior secured notes due in January 2025.

The company had a grace period of 30 days to meet the deadline before it would be considered in default. The grace period ended on Saturday but since it was a non-working day, the company got time till Monday.

“In furtherance to our letter dated July 22, 2020, wherein we had informed about the grace period of 30 days for making payment of interest on the above USD notes. Today... the company has made the payment of said interest for the half year ended for an amount of $14 million...,” the company said in a stock exchange filing.

Stake sale deal with RIL

While the immediate crisis has been averted, Biyani has a major challenge ahead in closing a stake-sale deal with Reliance Industries.

According to sources close to the development, valuation issues are holding up the deal. Biyani has been talking to Mukesh Ambani for at least three months, but so far there has been no agreement on the contours of the deal.

Future Retail has, since April, taken loans of ₹170 crore under the Common Covid-19 Emergency Credit Line scheme from multiple banks to keep its operations running.

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