State run Bank of India has filed an insolvency petition in the National Company Law Tribunal (NCLT), seeking to initiate insolvency proceedings against Future Retail, the company that manages Big Bazaar, over non-payment of dues.
Earlier this month, the debt ridden company had reported a default of Rs 5322 crores to it’s lender while citing the legal tussle with Amazon as the main reason. Bank of India, State Bank of India, Bank of Baroda, Indian Bank and IDBI Bank are among its major creditors. The company had also defaulted on interest payment of non-convertible debentures earlier this month.
“Please be informed that Bank of India has served an advance intimation of filing an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Company for default on non-payment of monies due in terms of the Framework Agreement entered into between the Company and Bank of India,” Future Retail said in an exchange filing.
The company is currently under a lot of stress from its lenders. Bank of India, the leader of the consortium of FRL lenders, had announced its claim on FRL’s assets last month through public newspapers and warned the public against dealing in assets of the Future Group.
On the other hand, the company is also under legal pressure from ecommerce giant Amazon. FRL is part of the 19 companies’ deal whereby Future Group will sell these companies relating to warehousing, retail, logistics and wholesale services to Reliance Retail Ventures Limited for Rs 24,317 crores. Amazon, a major investor in one of Future Group’s major companies, is against the deal.
The ecommerce operator has initiated proceedings under the Supreme Court, Delhi High Court and Singapore International Arbitration Centre. Moreover, the company has said that it would be illegal for the Future Group to hold meetings about the deal.
Future retail has received a copy of the petition filed by the bank and is in the process of taking legal advice.