June 27, 2022

Amazon asks Future Retail to give fin details to PE firm – Times of India

NEW DELHI: Amazon has asked Future Retail (FRL) to provide financial details to Samara Capital for expedited due diligence, as it wants the private equity player to pump Rs 7,000 crore into the Kishore Biyani-promoted company.
The cash-strapped retailer, ensnared in a near two-year legal battle with Amazon, is staring at a default as the grace period for paying Rs 3,500 crore in dues to its lenders ends on January 29. Its total liabilities to lenders aggregate to Rs 9,119 crore for interest and principal repayments up to March 2022.
“The transaction envisaged in the Samara term sheet would ensure availability of funds in FRL at the earliest, through an asset sale and an equity infusion, which would be a direct antidote to FRL’s indebtedness,” Amazon wrote in the letter dated January 22. “Samara and Amazon are confident that if the independent directors and FRL provide immediate access to the information and records of FRL and fully co-operate in the discussions, the transactions contemplated in the Samara term sheet can be implemented in an expedited manner. ”
The term sheet dated June 30, 2020, was signed among Samara, FRL and promoters of FRL. It provides for an acquisition of all retail assets of FRL for Rs 7,000 crore, including the “small store formats” through an Indian-owned and controlled entity structure led by Samara and supported by Amazon, according to the US e-tailer.
“The term sheet was rejected. Amazon’s willingness to help FRL is a smoke and mirrors game. Reliance has offered Rs 25,000 crore and the etailer is offering only Rs 7,000 crore. They think we are kids. We won’t accept it,” Ravindra Dhariwal, one of the threemember independent directors at FRL, told TOI.
Amazon further compared the Samara-Amazon acquisition structure with that of Reliance Retail and Fashion Lifestyle that announced its decision to purchase FRL in August 2020 for Rs 25,000 crore, a proposed deal that Amazon has tried to block. Amazon has argued that the Future-Reliance deal breaches terms of its contract with FRL and Reliance is a “restricted” party.

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