Shares of Kishore Biyani’s Future group nosedived more than 12% in early trade on Friday after lenders to the cash-strapped company rejected Reliance Retail’s proposed takeover scheme. Reacting to the news, shares of Future Lifestyle Fashions tumbled as much as 12.3% to hit an intraday low of ₹36 on the BSE, while Future Enterprises dived 6.1% to ₹6.15 apiece. Shares of Future Retail declined 4.9% to touch a low of ₹28.95, while Future Consumer’s stock price dropped 3.8% to ₹4.85. Among others, Future Market Networks, and Future Supply Chain Solutions fell up to 6%.
In a massive blow to Future group, the major lenders to the debt-laden company have rejected Reliance Retail’s proposed takeover scheme. Lenders have rejected the slump sale proposal to sell the Future group’s retail, wholesale and logistics assets to Reliance Retail Ventures after Reliance lowered the deal value, sources close to the development told Fortune India. State Bank of India (SBI), Bank of Baroda (BoB), Union Bank of India, and IDBI Bank are among the key members of the consortium.
The details regarding the banks’ decision to turn down Mukesh Ambani-led Reliance’s offer could not be immediately ascertained.
The decision was taken in a meeting of unsecured creditors of Future Retail Limited held on Thursday, in line with the directions issued by the National Company Law Tribunal, Mumbai bench in an order dated February 28, 2022.
The two-day shareholders and creditors meeting were held between April 20-21 after the Supreme Court allowed Future Group companies to convene a meeting to take their approvals for the ₹24,713 crore deal with Reliance Retail Ventures. The meeting was opposed by e-commerce major Amazon, which had contested the deal between Mukesh Ambani’s Reliance and Kishore Biyani’s Future.
The shareholders of six listed Future Group companies had voted on Wednesday over the deal to sell their assets to Reliance Retail. Shareholders of Future Enterprises, Future Consumer, Future Lifestyle Fashions, Future Market Networks, Future Retail, Future Supply Chain Solutions voted during the meeting on April 20. Shailesh Haribhakti chaired the meeting for Future Enterprises, Future Lifestyle Fashions, Future Retail and Future Supply Chain Solutions. Rajesh Kalyani and G.N. Bajpai were the chairpersons for shareholders meeting of Future Market Networks and Future Consumer, respectively.
Last week, Bank of India had approached the NCLT to initiate insolvency proceedings against Future Retail to recover ₹3,495 crore default on the one-time restructuring scheme between the bank and the company.