Reliance Industries Ltd has agreed to extend operational support to Future Retail Ltd to prevent its collapse.
Moreover, its Rs.24,713-crore deal to buy the cash-strapped retailer’s assets is yet to receive approval from a company law tribunal.
Further, the National Company Law Tribunal which was due to announce its ruling on Tuesday, adjourned the case until 15 March.
In the absence of the deal, Future Retail will collapse with several people ending up losing their jobs.
An estimated 11 lakh people will lose their livelihood if the deal fails.
Besides this, around 6,000 vendors and suppliers could lose their biggest customer.
However, the deal involves merger of five Future Group’s listed entities including Future Retail, Future Lifestyle and Future Consumer into Future Enterprises.
This currently houses the group’s retail back-end infrastructure.
Future Enterprises will then sell the retail, wholesale business, logistics and warehouse business to Reliance Retail and Fashion Lifestyle Limited.
However, Reliance Retail and Fashion Lifestyle Limited is a wholly owned subsidiary of Reliance Retail Ventures.
It will take over borrowings and current liabilities related to the business in a cash deal worth Rs 24,713 crore.
Post the transaction, FEL will retain the manufacturing and distribution of consumer products along with fashion sourcing and manufacturing business
This also includes insurance joint venture with Generali and textile partnership with NTC Mills.
Moving further, Reliance is set to invest Rs 2800 crore in FEL.
This comprises of 1200 crore in the preferential issue of equity shares for a 6.09% stake.
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