Amazon confirms that Samara Cap will invest Rs 7,000 cr in FRL to acquire assets
Amazon has written to the independent directors of Future Retail Ltd (FRL), confirming that Samara Capital “remains interested and committed” to investing Rs 7,000 crore for the purchase of all retail assets of the debt-ridden company and has asked the retail company to provide existing due diligence reports to Samara by Sunday, sources said.
On January 19, Amazon had approached the independent directors of FRL reiterating its willingness to help the Mumbai-based company solve its financial problems. In response, the independent trustees had asked Amazon to confirm by January 22 that it would inject Rs 3,500 crore into the cash-strapped retailer to repay FRL lenders by January 29, 2022.
Amazon – in its January 22 response – said “we confirm that based on your letter dated January 21, 2022, Samara Capital has once again reiterated to us that they remain interested and committed to leading and advancing the term sheet dated June 30, 2020, signed between Samara, FRL and the FRL promoters
The term sheet contemplates a purchase consideration of Rs 7,000 crore, according to the letter, a copy of which was seen by PTI.
“Appropriately, Samara’s term sheet provides for the acquisition of all of FRL’s retail assets, including ‘small store formats’ comprising the ‘Easy Day’, ‘Adhaar’ and ‘Heritage’ brands. , through an Indian owned and controlled entity structure led by Samara and supported by Amazon,” the e-commerce specialist said in the letter.
Amazon said the transaction contemplated in Samara’s term sheet would ensure funds are available in FRL at the earliest, through an asset sale and capital injection, which would be a direct antidote to FRL’s indebtedness.
Emails sent to Amazon and the Future Group elicited no response.
Amazon, in its latest letter, affirmed that its undertaking will not affect the binding nature of injunctions issued in the arbitration proceedings and by the Indian courts, and stated that the new transaction will include that “the transaction with the Mukesh Dhirubhai Ambani (Reliance Industries Limited) (MDA Group) will not prosecute and will not be acted upon; and all assistance will be provided through lawful structures.”
Future and Amazon were locked in a bitter legal battle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Center (SIAC) in October 2020, arguing that FRL breached their contract by entering into a agreement to sell its assets to billionaire Mukesh Ambani’s Reliance Retail on a sell-down basis for Rs 24,713 crore.
Earlier this month, Future Retail said it had missed the due date for payment of Rs 3,494.56 crore to banks and lenders as it could not sell assets due to its litigation. underway with Amazon, impacting its monetization plans.
Notably, in December fair trade regulator India’s Competition Commission (ICC) suspended the 2019 approval of Amazon’s deal to acquire a 49% stake in Future Coupons Pvt Ltd (FCPL), the developer of FRL, while inflicting a penalty of Rs 202 crore on the e-commerce major.
The ICC order was challenged by Amazon in the National Company Law Appellate Tribunal, which issued an opinion to the fair trade regulator and the FCPL. The NCLAT ordered the case to be listed on February 2 for the next hearing.
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