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Bond Market News
Future Retail’s Lenders to Withdraw Easing Measures if Reliance Deal Goes Through
April 22, 2021
Debt laden Future Retail’s lenders had last week given their consent to a debt restructuring plan through which the repayment to lenders would be deferred by 2 years. The plan was set under the guidance of India’s central bank RBI’s KV Kamath Committee that allowed the banks six months to implement the resolution plan from the date of invocation of the plan. However, the debt issuers could withdraw the concession granted to the troubled retailer in case its acquisition planned by Reliance Retail Ventures Ltd (RRVL) for ~INR 247bn ($3.28bn) in August 2020 goes through. The debt issuers include some of the major banks in Indian including Union Bank of India, Bank of India, Bank of Baroda, State Bank of India, Indian Bank, Central Bank of India, Axis Bank and IDBI. However, the acquisition of the distressed company has been thwarted due to litigation by Amazon that has filed cases both in Singapore and India to block the transaction. According to a banker cited by Mint, the approval of the restructure is likely to be implemented by April 26 and that “Once the deal is hopefully completed, the lenders plan to withdraw the relaxations and would prefer to get paid upfront,” the banker said. He added that the deal, after approval from the Kamath panel, is expected to be implemented by 26 April.”
Future Retails 5.6% 2025s were down 0.13 to trade at 80.5 on the secondary markets.
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