Future Retail said it has received termination notices for its sub-leased properties from Reliance Industries-owned entities, forcing it to shut as many as 835 stores across the country.
"So far notices have been received in respect of 342 large format stores [such as Big Bazaar, Fashion @ Big Bazaar (fbb)] and 493 small format stores (such as easyday and Heritage stores) of the company," the retailer said in an exchange filing.
These stores, according to the cash-strapped retailer, have been historically contributing around 55% to 65% of retail revenue operations of the company. "As of now these stores are not operational for stock and inventory reconciliation," the filing said.
The company said it is in continuous discussion with Reliance Group to maintain status quo and for "safeguarding the interest of various stakeholders".
Future Retail owes ₹6,278 crore debt to lenders including Union Bank of India, Bank of India, Bank of Baroda, State Bank of India, Axis Bank and IDBI Bank. Overall, the group companies owe around ₹30,000 crore to the banks.
Future Retail defaulted on its first repayment obligation of ₹3,495 crore in December following the one-time debt recast. Credit rating agency Care Ratings has downgraded the retailer to default grade.
Reliance Retail's ₹24,500-crore takeover of Future Group's assets was delayed for more than one and a half years due to the objections raised by Amazon as it holds 49% stake in Future Coupons, the promoter entity of Future Group.
Amazon had argued that Future Retail violated their contract by entering into a deal with Reliance. In December, 2021, the Competition Commission of India (CCI) revoked the US giant's 2019 agreement, citing misrepresentation and suppression of details.
The legal battle of Amazon and Future Group began in October 2020 after the e-commerce giant dragged the latter to arbitration at the Singapore International Arbitration Centre. The Delhi High Court division bench had stayed the Amazon-Future arbitration over the appeals filed by Future Retail and its promoters in January. Soon the Singapore International Arbitration Center (SIAC) terminated the arbitration proceedings in the dispute.