RIL seeks NCLT nod to approve Future Group deal

Mumbai bench of NCLT had on Wednesday reserved its order over the application moved by the step-down firms of Reliance Industries.

RIL (MINT_PRINT)

Reliance Retail and Reliance Fashion have approached the National Company Law Tribunal (NCLT) seeking its permission to hold meetings of their shareholders and creditors to consider and approve the proposed merger with Future Group's retail, logistics and warehousing business in a ₹24,713 crore deal.

The Mumbai bench of NCLT had on Wednesday reserved its order over the application moved by the step-down firms of Reliance Industries Ltd (RIL).

"The court (NCLT) has reserved the order. It will pass it on June 21," said senior advocate Janak Dwarkadas, who represented Reliance in the matter before the tribunal.

The application was filed by Reliance Retail and Reliance Fashion seeking approval to call meetings of their respective members and creditors for the purpose of considering the scheme by which the retail, logistics and warehousing business of the Future Group would be merged into these Reliance companies, Dwarkadas added.

On August 29, 2020, Future Group had announced that its retail and wholesale business would be sold to Reliance Retail in a ₹24,713 crore deal.

The deal, which is being contested by Amazon, is facing legal hurdles. A decision by the Supreme Court is pending over a petition filed by the US-based e-commerce major.

Amazon declined to comment on a query sent by PTI on the development, saying the matter is sub-judice. Future Group did not respond till the time of filing of the story.

Future Group has already moved NCLT seeking its permission to call a meeting of its shareholders to approve the deal. The tribunal has reserved its orders over its plea.

The scheme of arrangement entails the consolidation of the Kishore Biyani-led Future Group's retail and wholesale assets into one entity -- Future Enterprises Ltd and then transferring it to Reliance Retail Ventures Ltd (RRVL), as per the deal that was announced in August last year.

Earlier in April this year, Reliance Retail extended the timeline to complete the deal by six months till September 30, 2021.

The Future-Reliance deal, which was announced on August 29, 2020, has already received clearance from regulators such as CCI, SEBI and the bourses. The scheme of arrangement is now awaiting nod from the NCLT and shareholders.

Though the Supreme Court has granted a go-ahead to the NCLT for its proceedings, it has asked the tribunal not to pass any final order sanctioning the scheme.

Amazon and Future Group have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC), arguing that the latter had violated their contract by entering into the deal with rival Reliance.

Amazon had invested in Future Coupons in August 2019 with an option of buying into the flagship Future Retail after a period of three to 10 years.

On October 25, 2020, an interim award was passed in favour of Amazon with the single-judge bench of V K Rajah barring Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.