Future group defers board meet to approve Q4 results
Biyani-led firm to take up RIL deal today
Kishore Biyani-led Future Enterprises has set September 7 as the new date for the board meeting to approve its annual accounts for FY20. Earlier it was supposed to meet on Friday. However, the company is expected to discuss the Reliance Industries (RIL) deal to sell its retail business on Saturday.
Future Enterprises made a late evening announcement to the stock exchanges about rescheduling the board meeting for approving its results.
The deal with RIL is seen as critical for the struggling Future group.
In a parallel development, Indian lenders have asked the company to expedite the sale of stake in its insurance ventures so that the group can reduce the debt burden.
Future Enterprises holds a 49.91 per cent stake in the general insurance business and owns 33 per cent in the life insurance segment. While SBI General is set to merge its general insurance business with Future Generali India Insurance Co Ltd, the hunt is on for a buyer of the life insurance business. SBI General has already set up a team for integration of Future’s general insurance venture with itself.
The book value of the general insurance business is pegged at ~366 crore and the life insurance venture ~464 crore.
Banking sources said even after the possible sale of retail business to RIL, the lenders are not expected to get their entire dues back.
RIL is believed to have asked banks to take a haircut of up to 40 per cent on Future’s exposure worth ~12,000 crore. The banks’ exposure to the promoter entities of the Future group is another ~11,970 crore. The deal news has already pushed up the group’s stocks with market capitalisation of Future companies crossing ~14,000 crore on Friday.
Reliance has also asked Future vendors to take a steep haircut of around 40 per cent on their past dues, sources said. Some of the top Indian consumer products companies including ITC and HUL are suppliers to Future retail stores. Several vendors have complained that they have not been paid their dues since early this year.
In fact, Indian lenders want the transactions to close before the moratorium ends on August 31. The Future group companies had availed of the Covid-19 pandemic moratorium package announced by the Reserve Bank of India in March.
According to the plan made by the lenders and RIL, all Future Group listed companies will be merged into Future Enterprises. RIL will then invest ~8,500 crore in the merged entity.
During due diligence, RIL asked the Future Group for details about contracts relating to the properties, licences and statutory approvals required, along with organisation chart describing reporting lines and number of staff in each division, sources close to the development said.