Mumbai, January 25

Future Retail’s independent directors had told Amazon that the proposal to sell all its retail assets to Samara Capital for a total consideration of ₹7,000 crore “is a sorry attempt to buy FRL’s assets on the cheap”.

“It is now apparent that you neither were nor are serious about funding FRL, within the required timelines but merely want to block sale of small-store formats assets to repay lenders to avoid an NPA classification,” the independent director said in response to Amazon’s offer to help raise fresh funding to keep the company afloat.

The IDs accused that Amazon had not only undervalued Future Retail’s assets but it had also given no clarity on its request for immediate requirements for funds. Amazon had valued Future Retail’s assets at ₹7,000 crore. Whereas in August 2020, Reliance had valued Future Groups assets retail and wholesale business assets at ₹24,731 crore.

“Firstly this price is significantly below the amount needed to discharge FRL’s total liabilities - FRL’s Bank liabilities and part of the committed vendors payments till just March 2022 itself aggregate to ₹12,027.31 crore,” it said. When seen in the context of the financials of the Reliance transaction by way of the Scheme of Arrangement, it added, “your offer is plainly an attempt to buy the FRL assets on the cheap.”

To repay lenders

Future Retail had said that it urgently needed ₹3,500 crore to repay its lenders before January 24 in order to not being classified as a NPA. However, “You have chosen to ignore this requirement. FRL has a clear urgency of funds, and you are instead suggesting as an alternative an extensive due diligence exercise and have not even bothered to provide any timeline for funding, despite us specifically asking you to provide clarity on this point.”

Hence, “we do not think that it would serve any purpose to engage in any further discussions on the proposal made in Your Letter.” It further added that, “it is now clear that your letters were just a game of smoke and mirrors just to serve your purpose of gaining all media attention and create media headlines that 'Amazon is prepared to help'. Accordingly, we will not be assessing any proposals from you, until an actual solution which meets FRL's capital requirements and addresses concerns of its stakeholders, in a legally compliant manner, is tabled.”

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