Future Group challenges Delhi HC’s status quo order on RIL deal

Future Group challenges Delhi HC’s status quo order on RIL deal

If India’s Future Group cannot sell assets, $4 billion in bank loans and debentures will be at risk, pushing its retail unit into insolvency, the company said in a court filing on Wednesday against Amazon.com Inc, which wants to block the sale.

A court in New Delhi blocked Future Group’s sale of retail assets to Reliance Industries on Tuesday after Amazon raised objections to the deal.

The corporate battle has embroiled sprawling businesses led by two of the world’s richest men: Amazon’s Jeff Bezos and Reliance’s Mukesh Ambani.

Amazon had argued that Future breached contracts by selling retail assets to Reliance. The court sided with the U.S. firm, saying an earlier order from an arbitrator that put the Future-Reliance deal on hold was valid.

Future – which had argued the arbitrator’s order was not binding – on Wednesday filed a challenge against the court’s ruling, saying the company’s creditors would be at “significant risk” if the Reliance deal fails.

Other than an estimated 300 billion rupees ($4.1 billion) hit to bank loans and debentures, the deal’s failure would also impact livelihoods of 50,000 employees and 6,000 small- and medium-sized vendors, it said.

“It is inevitable that FRL (Future Retail) will go into liquidation … The magnitude of damage that may be caused to the public at large is unimaginable,” Future said the court filing, seen by Reuters.

The appeal is set to be heard on Thursday before a bigger two-judge bench in New Delhi.

Future, India’s second-largest retailer with more than 1,700 stores, and Amazon did not respond to a request for comment.

News source : Reuters

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