FUTURE RETAIL BOND SURGES AFTER SEBI NOD FOR RIL DEAL
MUMBAI: Future Retail Ltd.’s dollar bond jumped after a letter from a Mumbai-based stock exchange regarding Reliance Industries Ltd’s ₹24,710 crore ($3.4 billion) acquisition of the indebted retailer.
The company’s note due January 2025 surged 9.4 cents on the dollar to 89.5 cents, climbing the most in over four months after nine straight sessions of losses, according to Bloomberg-compiled prices.
The letter dated January 20 from the BSE Ltd said that based on comment from Securities and Exchange Board of India, the BSE “has no adverse observations” to matters having a bearing on the planned acquisition.
The proposed deal is key for Future Retail to survive a hit from the fallout of the coronavirus pandemic.
India’s antitrust regulator, Competition Commission of India had already approved the acquisition in November, but Future’s partner Amazon.com Inc. had called for it to be blocked, saying that it violated its contract with the company.
Meanwhile, shares of Future Retail and Future Enterprises rose nearly 5% and hit upper circuit limits on Sebi’s clearance of the proposal.
On the BSE, Future Retail Ltd’s shares hit the upper circuit of ₹81.35, rising 4.97% over the previous close.
Future Enterprises Ltd’s stock gained 4.98% to touch the upper circuit limit of ₹12.01.
Meanwhile, Reliance Industries Ltd (RIL) was trading at ₹2,114.8 during the late morning trade, rising 2.91%.
Amazon had written several letters to the Sebi and other regulatory agencies to suspend their review of the deal and not grant it a no objection certification on ground that its challenge to the agreement was before the Delhi high court.
“It is observed that there are certain ongoing litigations/ arbitration/legal proceedings against the draft scheme,” the Sebi said.