India’s Future Group plans to challenge its own lenders in the Supreme Court to avoid being named a defaulter for missing payments. Siting its ongoing dispute with partner Amazon.com Inc , three sources told on Thursday.
Future, the country’s second-largest retailer, has since 2020 failed to complete its $3.4 billion retail asset sale to a rival due to successful legal challenges by Amazon. Which argues the Indian group violated certain non-compete contractual terms the two sides had. Future denies any wrongdoing.
The company told Indian exchanges this month it was unable to pay 35 billion rupees ($470 million) to its lenders. 31 as it could not sell certain small stores due to the dispute with Amazon. It had hoped to use a 30-day grace period to resolve the situation.
Future also did not respond.
The sources said Future was readying an approach to the Supreme Court within days to urge judges to stop its lenders from taking any drastic steps and extend timelines to allow it to sell its small stores and clear its dues. Companies 1,700 outlets include roughly 900 small-sized stores, with the rest being large-format hypermarkets and fashion outlets.
Further, the company is also likely to ask judges to direct the country’s central bank. To extend the 30-day regulatory grace period. And ask the lenders to not declare the Indian retailer as an NPA for the time being. The lead bankers to Future, State Bank of India, Bank of Baroda and Bank of India, and India’s central bank did not immediately respond to a request for comment.
Companies plans signal growing distress at the Indian retail group, which has said it fears liquidation. More than 27,000 job losses at its main retail arm, Future Retail, if its asset sale plan to rival Reliance. Amazon has long argued that Future violated the terms of a 2019 deal they had signed when the U.S. firm invested $200 million in a Future unit.