Future Retail gets lenders’ nod to restructure debt

Our Bureau Mumbai | Updated on April 18, 2021

Repayment of loans to be extended up to a maximum of 2 years.

Future Retail has got approval from lenders to restructure its debt, with 100 per cent consent from 28 banks. The Kishore Biyani-owned company has also got a waiver of penal interest and charges, default premiums, processing fees unpaid since March 2020.

“The Covid-19 pandemic has deeply impacted the long-term business viability and led to significant financial stress across the industries. The debt burden has become disproportionate relative to the cash flow generated by the company owing to the multiple lockdowns since the pandemic surfaced, posing significant financial stability risks to the business. Hence, the restructuring of the debt is crucial and essential,” the debt-strapped company said.

The lenders have approved the restructuring of the working capital Demand Loans, Term Loans, Cash Credit, Short Term Loans, NCDs, Purchase Bill Discounting Limits, other working capital loans and unpaid interest, which became overdue.

“Repayment of short term loans, term loans, NCDs, overdue working capital loans (converted into Working Capital Term Loans) to be extended up to a maximum of 2 years.”

Big Bazaar’s parent company said that all securities created on assets of the Company should continue to operate in favour of the lenders in the ranks assigned originally, “exception being an extension of the second charge on movable fixed assets being extended to working capital consortium lenders as a part of the restructuring.”

The lenders also gave an interest moratorium between March 1, 2020 to September 30, 2021. “Interest during the period shall be converted into Funded Interest Term Loan (“FITL”) which shall be payable by December 2021.” Cash Credit to be continued at a reduced level based on bank assessment.

All penal interest and charges, default premiums, processing fees unpaid since March, 2020 to implementation date to be waived off fully.

The restructuring is happening under the RBI circular issued based on the Kamath Committee report to rescue companies on economic fallout due to the Covid-19 pandemic and facilitate the revival of business across the industries.

Published on April 18, 2021

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