Secured lenders of Future Group firm Future Retail Limited (FRL) have rejected the Rs 24,713 crore acquisition deal by Reliance Retail with a majority vote.
FRL informed the stock exchanges on Friday that the lenders giving it secured loans have disagreed with the agreement signed with Reliance Retail with a majority of 69.29 per cent. The proposal put forward for the approval of this agreement got the approval of only 30.71 percent of the lenders.
Who’s Support: The earlier deal between FRL and Reliance Retail has got the support of over 75 per cent shareholders and unsecured lenders. 85.94 per cent shareholders of the company have voted in favor of the proposal, while it has got the support of 78.22 per cent of the unsecured lenders.
Minimum 75 per cent support required: However, this proposal has not got the required support of at least 75 per cent of the secured lenders. Secured lenders are given collateral from the borrower company and have priority over unsecured lenders at the time of repayment of any dues.
Voting also in Future Lifestyle: Future Lifestyle Fashion Ltd, another part of the Kishor Biyani-led conglomerate, said 82.75 per cent of its secured creditors also voted against the deal. However, the majority of shareholders and unsecured creditors have supported it. In fact, several Future Group companies had called meetings of their shareholders, secured and unsecured lenders this week, in which it was proposed to seal the merger deal with Reliance Retail.
The Future Group, while announcing the deal in August 2020, had said that 19 of its companies operating in the retail, wholesale, logistics and warehousing sectors would be sold to Reliance Retail Ventures Limited. American e-commerce company Amazon has been continuously opposing this deal. It says the deal is in violation of Future’s Rs 1,500 crore investment agreement with it in the year 2019.