Future Retail isn’t in a position to make a payment on ₹35 billion ($471 million) of past-due debt before the grace period expires and will also miss an upcoming $14 million bond coupon deadline, according to people familiar with the matter.

Its dollar bond fell following the news, suffering its biggest decline in about three weeks on Friday.

Embroiled in a legal dispute with Amazon.com Inc. that has damaged its ability to raise funds, the Mumbai-based retailer is coming up against two key milestones that will test creditors’ faith after its onshore debt was restructured during the pandemic. 

Having already missed a December 31 deadline to lenders, Future has until the end of this month to come up with the money for the rupee-denominated debt. But it won’t be able to do so, the people said, asking not to be identified because the discussions are private.

Coupon payment

The company will also not be able to make a coupon payment due January 22 on its $500 million bond, according to the people.

A spokesman for the company didn’t immediately respond when contacted by Bloomberg by both email and telephone on Thursday.

The indebted Indian firm’s dollar bond maturing in 2025 fell 1.7 cents on the dollar to 57.9 cents as of 11:07 a.m. in Hong Kong Friday, the biggest decline in about three weeks. 

Future Retail cited its litigation with Amazon.com as the reason for its inability to complete an asset sale and use those proceeds to repay the rupee debt due late last year. 

The dollar bond coupon payment has a 30-day grace period. The company has missed such interest payments before the initial deadlines but then paid within the grace periods.

One of the people said Future would make the dollar bond payment within the grace period.