InvestorQ : Why have the creditors of the Future group been pressurizing the company to pay up their dues ahead of the merger with Reliance?
Mary Joseph made post

Why have the creditors of the Future group been pressurizing the company to pay up their dues ahead of the merger with Reliance?

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Arusha Ray answered.
4 months ago
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In a sense, the banks are getting jittery that if the Amazon fracas with the Future group continues endlessly, then Reliance Industries may lose interest in the merger and look for other options to expand its presence in the brick and mortar space. That is one of the main reasons why the lending banks have been getting jittery of late.

Future group owes more than Rs.18,000 crore to banks and other lenders and rightly the creditors of Future Group are worried now the deal with RIL has failed to fructify in the last 6 months despite having the blessings of both the sides. Therefore, the banks are already exploring options to recover $2.5 billion of loans and putting pressure on the Future group and its chairman, Mr. Biyani.

Banks are now getting apprehensive that the deal between FEL and RRIL could fail to take off if the case with Amazon drags on in the courts in India and abroad. If Reliance walks out of the deal, then Future group would face absolutely certain liquidation as it just does not have the cash flows to run the business on a going concern basis.

This could put most of the creditors in the lurch. Banks are now even open to a one-time restructuring option including easier repayment tenure and fresh capital infusion providing the money starts coming back. Reliance Retail has been patient for long enough but bankers fear that if the imbroglio continues, Reliance may run out of patience. More so, considering their sense of urgency! SBI has the largest exposure to Future group followed by BOB.

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