Reliance Retail Ventures (RRVL), India’s largest retail company, and six other companies have submitted expressions of interest (EoIs) for bankrupt Future Supply Chain (FSC), the logistics and warehousing management arm of Future Group.
One City Infrastructure, Globe Ecologistics, Shanti GD Ispat & Power, Camions Logistics Solutions, Tatkal Loan India, and Sugna Metals have also submitted their EoIs for the company. These companies will be asked to make financial offers for the company once their EoI is approved by a resolution professional and lenders.
Future Group’s warehousing and logistics requirements are managed by FSC and were once considered critical to the operations of the group.
At its peak, the company’s inventory management tools allow the group entities to monitor, manage, and control the inventory levels. The major group entities, such as Future Retail (FRL) and Future Lifestyle, have warehouses at various locations in each zone, which feed the regional warehouse, which, in turn, is used to provide services to the stores across all the locations before Future Group companies went bankrupt.
RRVL had made an offer to take over the entire Future Group business in August 2020 for Rs 24,713 crore. The transaction, however, collapsed after American retail giant Amazon initiated litigation against it. Later, lenders moved to bankruptcy court against all Future Group companies.
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RRVL had also expressed interest in acquiring FRL, the group’s flagship company, but later withdrew from making any offer.
A spokesperson for Reliance declined to comment.
In December 2019, Nippon Express (South Asia & Oceania), a subsidiary of Japan’s Nippon Express acquired a 22 per cent stake in FSC through a mix of primary and secondary issuance.
Through this partnership, Nippon Express and FSC planned to exploit synergies, given their complementary skill sets and services offering, and gain a deeper foothold in the large and growing Indian logistics sector.
The investment would have given Nippon Express and FSC to expand and explore logistics requirements across sectors in the Indian market. The deal would also help the Indian company access Nippon Express’ Japanese multinational clients for exploring new business opportunities in India, especially for third-party and express logistics operations.
But within a few months, the pandemic hit the world, with almost all stores shutting down across India. The shutting down of stores and litigation led to a loss of cashflows for all Future Group companies, which started defaulting on bank loans.
In the case of FRL, the two large conglomerates RRVL and a joint venture of Adani Group exited the race, thus dimming the prospects of any high recovery.
The highest bid for FRL was made by SpaceMantra. The other five companies that placed their bids included Pinnacleair, Palgun Tech LLC, Lehar Solutions, Goodwill Furniture, and Sarvabhishta E-Waste Management.
Future Group companies owe close to Rs 19,000 crore.
The lenders were in talks with the National Asset Reconstruction Company to sell the loans, but no announcement has been made so far.