RIL may buy Future’s retail biz for ₹27k cr
ESTIMATED DEAL VALUE INCLUDES LIABILITIES OF FUTURE GROUP THAT
RIL PLANS TO ABSORB
nNEW DELHI/MUMBAI: Reliance Industries Ltd (RIL) is close to buying Future Group’s retail assets for ₹24,000-27,000 crore to bolster its position in India’s retail segment, according to two people familiar with the details of the deal.
The estimated deal value includes the liabilities of Future Group that Reliance plans to absorb, the people said on condition of anonymity.
Five listed entities, including Future Retail Ltd, Future Consumer, Future Lifestyle Fashions, Future Supply Chain and Future Market Networks, will be merged into Future Enterprises Ltd (FEL) before the sale of the assets, the people said on condition of anonymity.
FEL will then conduct a slump sale of its retail assets to one of the retail subsidiaries of Reliance Industries Ltd.
RIL has exclusivity on the deal till 31 July, by when it needs to sign a binding agreement, said the first person, requesting anonymity. Negotiations are currently on and the deal could take time to culminate, he added.
FEL develops, owns and leases the retail infrastructure for the group, according to information on the company’s website. It also holds the group’s investments in subsidiaries and joint ventures, including insurance, textile manufacturing, supply chain and logistics.
As part of the deal, fashion and grocery retail formats from Future Group’s listed entities such as Big Bazaar, Foodhall, Nilgiris, FBB, Central, Heritage Foods and Brand Factory, barring apparel brands Lee Cooper and All, will be acquired by RIL. In all, over 1,700 stores across formats are expected to go to RIL.
E-mailed queries to Reliance Industries and Future Group remained unanswered.
RIL will also absorb partnerships that the Future Group has with foreign brands and retailers. For instance, Future Retail had signed a master franchise agreement with 7-Eleven Inc. to develop and operate 7-Eleven stores in India. No stores have opened so far, but the business is expected go to RIL.
The deal comes at a time when Future Group, founded by Kishore Biyani, has accumulated heavy debt over the years.
nNEW DELHI: India’s rural unemployment rate climbed up for the second consecutive week as agricultural activities slowed down, reducing the capacity of this sector to absorb workers and also because parts of rural India observed fresh lockdowns.
The rural unemployment rate climbed to 7.66% in the week ended July 26 against the 7.1% reported in the week to July 19, according to fresh data from the Centre for Monitoring Indian Economy (CMIE).
This is lower than the immediate week preceding the lockdown, but is much higher than the week ended March 15 (6.07%), when India was fairly in a better position and the Covid-19 pandemic had not spread even moderately.
The national unemployment rate also inched up to 8.21% in the week ended July 26 as against 7.94% in the week to July 19 and 7.44% in the week to July 12.
However, the urban unemployment rate dropped marginally to 9.78% from 9.92% during the same time period, CMIE data showed. In a way, this is also the highest joblessness rate in three weeks. Unlike June, July will not see a good recovery in replacement jobs, and fresh job creation will take time, said economists and experts. They argue that along with the summer crop sowing season, which is drawing to a close, the spreading Covid-19 in rural India has impacted the employment scenario.
Experts said urban India will see a marginal recovery as cities such as New Delhi and Mumbai are showing positive progress to some extent, but it will take time for formal jobs to return. The CMIE data for urban unemployment showed that it has marginally dropped to 9.43% in the week to July 26 as against 9.78% in the previous week. Despite the decline, the urban joblessness rate is higher than both the rural and overall unemployment rates.