India’s Reliance set to take over 200 Future stores in dispute with Amazon – sources | Techno Glob

NEW DELHI, Feb 26 (Reuters) – Reliance, India’s biggest retailer, is to take over at least 200 Future Retail (FRTL.NS) stores after the company failed to make lease payments for them to Reliance, two people having direct knowledge of the matter. told Reuters on Saturday.

Since 2020, Reliance has failed to complete a $3.4 billion deal to acquire the retail assets of Future, whose partner Inc successfully blocked the deal citing breach of certain contracts. Future denies any wrongdoing.

The takeover of the stores by Reliance signals the deterioration of Future’s financial situation. In January, Future challenged its lenders in India’s Supreme Court to avoid facing insolvency proceedings over missing bank payments, citing its dispute with Amazon. Read more

Future – which has more than 1,700 outlets, including popular Big Bazaar stores – was unable to make rental payments for some of its outlets. As a result, Reliance transferred the leases of some stores into its name and sub-leased them to Future to operate the stores, the sources said.

As Future failed to make the payments, Reliance decided to manage and rebrand about 200 outlets that would otherwise be closed, they said.

In a statement to Indian stock exchanges, Future said “termination notices have been received for a significant number of stores” which it “will no longer have access to.”

The company is “reducing operations, which will help us reduce losses in the coming months,” she said, not mentioning Reliance’s plan to take over many such outlets.

Reliance and Amazon did not respond to requests for comment.

“Over 200 stores will switch to Reliance stores,” said a source, who asked not to be named because details of the plan were not public.

In a letter seen by Reuters, Reliance offered future employees of those stores new jobs on the same terms. “We invite you to join our organization,” it read.

Amazon argued that Future violated the terms of a 2019 agreement the companies signed when the US giant invested $200 million in a Future unit. Amazon’s position was backed by a Singapore arbitrator and Indian courts.

Reporting by Aditya Kalra in New Delhi Editing by William Mallard and Mark Potter

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