Reliance Retail Ventures Ltd (RRVL), the retail holding company of Reliance Induastirs (RIL), has called off its ₹24,713 crore takeover offer for Future group's retail business. In a notice to stock exchanges, RIL said the secured creditors voted against RIL's scheme of arrangement. "In view thereof, the subject scheme of arrangement cannot be implemented," the company said.

With this, the deal stands cancelled. Reliance has already taken over 830 of the 1,400 stores of Future group for payment default of rental dues. The secured creditors had the understanding that RIL won't agree for the earlier offer in the scheme of arrangement for the remaining 550 plus stores, which are 70% non-operational. Since they were not getting any clarity from RIL, the creditors voted against the deal.

However, it has become an opportunity for RIL to call off the offer. Future group has been engaged in a messy legal war with Amazon, the world's largest e-commerce player, for the ₹24,713 crore deal with RRVL to happen. Amazon, which has 3.58% stake in Future Retail, indirectly, has invoked its rights to deny any of the Future's deal with rival retail firms in the country.

Amazon has got upper hand in the litigation with Future after the Supreme Court ordered to resume the arbitration case in Singapore International Arbitration Centre (SIAC). In an earlier plea filed by Amazon against Reliance-Future deal, the Singapore Emergency Arbitrator had stopped the deal in an interim order.

With the deal called off, Future group will not be able to repay any of its debts and bankruptcy proceedings will soon start against the company. Bank of India had already moved the National Company Law Tribunal (NCLT), filing a petition to initiate insolvency proceedings against debt-ridden Future Retail Ltd (FRL). It owes ₹20,000 crore to banks and ₹8,000 crore to unsecured creditors and vendors.

Due to the financial stress, Future group companies were not able to pay the rent for their stores in the last two years. Resultantly, most of the landlords terminated the leases. At that point of time, RIL stepped in and signed the leases with landlords and then sub-leased the stores to FRL to continue operations. But it was as predicted, Future defaulted the rents further to RIL and the latter took over the properties and started their own retail operations under 'Smart' brand name.

Amazon recently issued a public notice in newspapers, accusing FRL of transferring hundreds of its stores to Reliance in a "clandestine manner." Earlier, Amazon had given a ₹7,000 crore private equity offer through Samara Capital, which is backed by the ecommerce giant, to Future to make loan repayments. It is not clear who will now back Future to come out its debt crisis.

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