Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd (RIL), has extended the long-stop date for completion of its ₹24,713 crore ($3.3 billion) deal with Kishore Biyani’s Future Group by another six months to March 2022. This comes as Future Group remains locked in a legal battle with Amazon.
Long stop refers to the timeframe in which all conditions precedent for deal are met for the transaction to conclude. The deal was originally expected to be complete by 31 March 2021.
“Reliance Retail Ventures Limited (RRVL) has in exercise of the right provided thereunder, extended the timeline for Long Stop Date from September 30, 2021 to March 31, 2022 which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly owned subsidiary of RRVL,” Future Enterprises said in a statement to the BSE.
The scheme of arrangement between Future and Reliance Retail entails consolidation of Future Group’s retail, wholesale, logistics and warehousing assets into one entity–Future Enterprises Ltd–which would then be transferred to Reliance Retail on a slump sale basis.
In August last year, Reliance Retail agreed to buy assets of Future Group for ₹24,713 crore. The deal was contested by Amazon, an investor in Future Coupons, which is a shareholder of Future Retail Ltd.
In August 2019, Amazon had bought a 49% stake in Future Coupons, which owns 7.3% equity in Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of 3-10 years.
After Reliance announced the deal, Amazon dragged Future to the Singapore International Arbitration Centre (SIAC), which passed an interim award barring Future Retail from moving ahead with the deal.
Amazon and Future are now fighting a legal battle in the Supreme Court, which recently ruled in favour of Amazon by holding that the award from SIAC was valid and enforceable under Indian laws.