Future takeover deferred
RELIANCE Retail Ventures, the retail arm of Reliance Industries, has extended the timeline for six months to complete its `24,713 crore (£2.4bn) deal with Kishore Biyani-led Future Group to buy its retail and wholesale business.
Reliance Retail Ventures Ltd (RRVL) has extended the timeline for the “Long Stop Date” from March 31, 2021 to September 30, 2021, said a regulatory filing by Future Retail.
“Pursuant to the provisions of scheme and other transaction documents executed in relation thereto, RRVL has in exercise of the right provided thereunder, extended the timeline for ‘Long Stop Date’ from March 31, 2021 to September 30, 2021, which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly-owned subsidiary of RRVL,” it said.
Long Stop, an established practice in mergers and acquisition transaction, is a timeframe in which parties agree on all the conditions precedent for a transaction need to be fulfilled and the transaction completed.
The deal, which is contested by Amazon, is facing legal hurdles and a decision from the Supreme Court is pending over the petition filed by the e-commerce major. The Future-Reliance deal, which was announced on August 29, 2020, has already received clearance from regulators such as CCI, SEBI and bourses, and the scheme of arrangement is now awaiting the nod from the National Company Law Tribunal (NCLT) and shareholders.
Though the court has granted a go-ahead to the NCLT for its proceedings, it has asked not to pass any final order sanctioning the scheme. The NCLT has reserved its order over the scheme of arrangement in which all the Future Group’s retail assets would be consolidated under Future Enterprises Ltd and transferred to RRVL.