InvestorQ : Do you see major risks to the Biyani group if the war with Amazon continues for longer?
Sam Eswaran made post

Do you see major risks to the Biyani group if the war with Amazon continues for longer?

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Moii Chavate answered.
7 days ago
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Actually, the biggest risk in the deal is to the Biyanis as they need the funds to come in quickly to fructify their debt repayment. If the deal gets either delayed, derailed or cancelled, then Future group could be in a real soup as it is already running an operation that is financial unviable. Where does the group go from here?

The pressure is already building up from the side of banks. For example, only last week, the consortium of banks led by SBI asked the Future group to pay part of the outstanding loans. Future group owes Rs.15,000 crore to the banks and these creditors are getting jittery with the deal getting delayed.

Banks are worried that if the deal is further delayed and Reliance opts out then banks may have no choice but to write off the entire loan. To avoid this situation the banks are insisting that the group at least makes a partial payment to reduce their risk. Once a small payment is done, banks are also open to work out a restructuring plan for the loans.

The issue is that Biyanis maybe running out of time and cannot afford to wait for too long. If the case drags on for too long, Reliance may explore other options. That would also mean more pressure from the banks and other creditors of the Future group. Let us not forget that if the Tata App is launched by then, then the economics of this deal could change. Or the Biyanis, the sooner the deal is closed, the better it will be.

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