Adding further trouble to the indebted Future Group, public sector lender Bank of India on Tuesday filed a petition with the National Company Law Tribunal (NCLT) to start insolvency proceedings against Future Lifestyle Fashions. Future Lifestyle Fashions is the clothing arm of the Future Group.
Future Lifestyle, in response, said that it is currently in the process of receiving legal advice on the matter.
Apart from this, the company is already facing two other insolvency applications; one from its financial creditor Catalyst Trusteeship Ltd, claiming a breach of Rs 451.98 crore and the second petition from an operating creditor Lotus Lifespaces LLP, claiming a breach of Rs 150.37 crore.
Future Lifestyle has Central and Brand Factory in-house retail chains, Exclusive Brand Outlets (EBOs) and other Multi-Brand Outlets (MBOs) of clothing brands including: Lee Cooper, Champion, aLL, Indigo Nation, Giovani, John Miller , Scullers, Converse and Urbana.
The company’s lay court has already initiated the CIRP (corporate insolvency resolution process) against Future Retail, the flagship firm of Future Group, led by Kishore Biyani, after admitting the Bank of India’s guilty plea.
The Future Lifestyle board has already initiated “monetization of identified assets”, subject to the necessary approvals from the lenders.
Last week, Future Lifestyle, while declaring its results for the April-June quarter, had reported that under the Single Restructuring Plan (OTR) with lenders, it has debt service obligations totaling Rs 422.11 million of rupees in the next 12 months. .
This comprises principal repayment of long-term debts of Rs 277.04 crore and short-term loans of Rs 145.07 crore.
Future Lifestyle had further said that its “current liabilities exceeded its current assets (including assets held for sale) by Rs 1,180.66 crore as at 31 March 2022”.
In addition, it has already defaulted on Rs 335.08 crore of the principal amount of bank loans as of June 30, 2022.
“The leading bank and the State Bank of India have classified the company’s accounts in the system as non-performing assets (NPA) on May 31, 2022, followed by other banks during the month of June 2022,” it said.
Future Lifestyle was part of 19 group companies operating in the retail, wholesale, logistics and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713 crore deal announced in August 2020.
The deal was canceled by Reliance Industries, run by billionaire Mukesh Ambani, in April after it failed to win support from the respective companies’ lenders.
After this, the group found themselves in serious financial trouble.
Future Enterprises is also facing two requests from its creditors to initiate insolvency proceedings against the company.
(With contributions from the PTI)
Source: www.businesstoday.in