Forty-nine prospective resolution applicants (PRAs) have submitted expressions of interest for Future Retail, including Reliance Retail, Jindal Power, an Adani Group joint venture, UK-based travel retailer WH Smith Travel Ltd, and a number of scrap dealers and waste recyclers.
This is a provisional list released by the Resolution Professional. Future Retail has been undergoing bankruptcy proceedings since July last year.
Incidentally, the RIL Group, the Adani Group, and WH Smith had been among the earlier list of final PRAs released in November last year. Future Retail has franchise rights from WH Smith Travel to operate its retail stores in India.
JC Flowers Asset Reconstruction was not on the earlier list. It is an active participant in buying stressed assets in India. Last year, it acquired a pool of non-performing assets from YES Bank for $1.4 billion.
None of the PRAs, who were shortlisted earlier, submitted resolution plans though the deadline was extended twice, the last being February 20. On March 23, the RP again invited expressions of interest with some differences. PRAs could submit a bid for the company as a whole (Option 1) or they could submit bids for clusters (Option 2), which the RP split into five.
Cluster 1 is the business of Future Retail on a standalone basis with large and small format stores. Cluster 2 is the stake of Future Retail in TNSI, running the WH Smith business. Cluster 3 is the gourmet food chain and food hall business. Cluster 4 is inventory and fixed assets at various locations, and Cluster 5 are the residual assets, investments, and brands that are not part of the other clusters.
Interested parties can submit resolution plans for either the first option or for any individual cluster or a combination of them. Weightage would be given to those who submit plans for the first option, that is the company as a whole.
The piecemeal sale of the company in the form of clusters has attracted interest from a good number of scrap dealers and waste recycling companies, as the list showed. They are likely eyeing the fixed assets of the company which is in the form of furniture, fixtures, and leasehold improvement within the rented stores.
Store stats and dues
Future Retail’s store network has been considerably depleted by Mukesh Ambani-owned Reliance Retail acquiring the lease rights of many of the stores, as the Future Group was unable to pay rent.
At the end of 2020-21, the company had 1,308 stores across 397 cities. By July 2022, when insolvency proceedings commenced, it had only 300-odd leased stores of which 30 were large format stores and over 270 small format stores. Some of the stores have been taken over by the landlords for non-payment of dues and legal action is being taken against them.
As of March this year, lenders were claiming dues worth ₹21,555 crore, of which ₹19,183 crore has been admitted. Operational creditors, including employees, government agencies, and vendors were claiming dues worth about ₹9,300 crore, of which ₹8,230 crore has been admitted.
The final list of PRAs will be released on April 13, while the deadline for submitting resolution plans is May 15.