Reliance Retail extends deadline to complete Rs 25K cr Future deal

MUMBAI: Reliance Retail Ventures, the retail arm of Reliance Industries, has for the second time extended the timeline for completing its Rs 24,713 crore deal with Future Group to March 31, 2022 as it awaits regulatory and judicial clearances.

In a regulatory filing on Friday, Future Retail said Reliance Retail Ventures Ltd (RRVL) has "extended the timeline for Long Stop Date from September 30, 2021 to March 31, 2022 to which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Ltd, wholly owned subsidiary of RRVL".

Earlier, RRVL had extended the timeline for the Long Stop Date from March 31, 2021 to September 30, 2021, said a regulatory filing by Future Retail.

Long Stop, an established practice in mergers & Acquisition transaction, is a timeframe in which parties agree on which all the conditions precedent for a transaction need to be fulfilled and the transaction completed.

Last week, the National Company Law Tribunal (NCLT) had allowed Future Group firms to hold meetings of its shareholders and creditors to seek approval for the sale of assets to RRVL and dismissed the application filed by e-commerce major Amazon opposing the scheme of merger of the Future group companies.

Amazon had filed an application objecting to NCLT considering the scheme pending completion of its arbitration proceedings against Future Retail.

The scheme of arrangement between Future and Reliance Retail entails the consolidation of Future Group's retail, wholesale, logistics and warehousing assets into one entity -- Future Enterprises Ltd -- and then transferring it to Reliance Retail.

In August last year, RRVL had said it will acquire the retail and wholesale business, and the logistics and warehousing business of Future Group for Rs 24,713 crore.

The deal has been contested by Amazon, an investor in Future Coupons that in turn is a shareholder in Future Retail Ltd. In August 2019, Amazon had agreed to purchase 49% of one of Future's unlisted firm, Future Coupons Ltd (which owns 7.3% equity in BSE-listed Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of 3 to 10 years.