Bonjour, new guests from small-town India
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
A Big Bazaar retail outlet (file photo)
Future Retail is believed to have taken loans worth ₹170 crore under the Common COVID-19 Emergency Credit Line (CCECL) scheme from multiple banks since April. This comes even as the Kishore Biyani-led retail company is struggling to stay afloat due to mounting debt, and the Covid-19 pandemic.
According to a source, Future Retail has applied for loans to the tune of ₹170 crore and has requested a moratorium of extension on loans from two banks for 90 days for an amount worth ₹20 crore. These loans have been availed from three nationalised banks including SBI, Allahabad, and Union Bank.
Earlier this year, public sector banks had offered multiple Covid-19 related Credit Schemes. Under these, companies can avail of a demand loan facility for up to ₹200 crore.
The tenure could go up to a maximum of 24 months and the amount is repayable in 18 equal monthly instalments after a moratorium of six months from the date of disbursement.
Besides the CCECL, “In FY21, the company has applied for loans worth ₹330 crore to stay afloat,” the source added. When contacted, Future Retail remained unavailable for comment.
Future Retail has been struggling to stay afloat for the past two fiscals and Covid-19 has come as a fresh blow for the retail company.
Due to acute cash crunch, in July this year, the company had missed the first interest payment worth ₹100 crore on its $500-million 5.6 per cent senior secured notes due in January 2025. The company has a grace period of 30 days to meet the deadlines before it is considered a default.
However, over the past month, multiple credit rating agencies have downgraded Future Group, including Future Retail, and Future Enterprise.
ICRA, which rates six of Future Group’s listed firms, stated that the debt book of the Biyani-led company increased to ₹12,778 crore as of September 2019 from ₹11,463 crore in March 2019.
On a consolidated basis, Future Retail, which owns Big Bazaar, EasyDay and Foodhall among other brands, has over 1,388 stores with operations across 414 cities as of December 2019. Due to the pandemic, Future Retail has also requested the BSE to delay the announcement of is FY20 Q4 results.
Meanwhile, BusinessLine had reported that Future Group was in conversation with the Mukesh Ambani-led Reliance Industries Limited to acquire majority of the Future Group’s retail arm. The deal was supposed to be inked before July end but there has been a delay in ironing out a few issues, which is a cause of concern for its lenders.
Puneet Dhawan of Accor is brimming with ideas on ways to revive the hospitality sector
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