Future Retail lenders give nod to debt recast plan
MUMBAI: A group of 28 lenders to Future Retail have approved a resolution plan to restructure the company’s existing debt under the RBI’s special scheme for Covid-related stress, the retailer said in a regulatory filing on Saturday. The restructuring is, however, subject to the K V Kamath-led expert committee’s nod.
The resolution plan also includes the restructuring of Future Retail’s non-convertible debentures (NCDs) that are listed on bourses. However, NCDs issued to certain trusts and US bonds, carrying an annual interest of 5.6% and maturing in 2025, will not be part of the resolution plan, Future Retail said.
The company believes that it will be able to recover from the Covid-induced financial stress once the resolution plan is implemented. Future Retail has a debt of about Rs10,000 crore and the restructuring will give promoter Kishore Biyani time to chalk out a new strategy even as he awaits the court’s approval on the sale of the company’s business to Reliance.
As part of the resolution plan, lenders have agreed to extend the repayment period of working capital loans by two years. They have also decided to waive unpaid penal interest and processing fees from March 2020 till the implementation date of the plan. They have also agreed to convert interest accrued between March and September 2020 into a loan, which will have to be paid by December.