Future Retail Limited (FRL) said it is struggling to fund working capital requirements as it is going through an acute financial crisis.
The struggling retail major said in a statement that “shareholders are aware that FRL is going through an acute financial crisis. The company has defaulted on its loan service and as already informed the company’s account has been closed as a non-performing asset by The ongoing litigation initiated by Amazon in October 2020, and which has been ongoing for a year and a half, has created serious obstacles to the implementation of the scheme, resulting in serious negative repercussions on the operation of the business “.
Future Retail further indicated that it is struggling to fund working capital requirements as “increasing store-level losses are a serious concern and constitute a vicious cycle in which larger operations result in larger losses. high”.
“The company has lost Rs 4,445 crore over the last four quarters. Termination notices have been received for a significant number of stores due to huge outstanding, and we would no longer have access to these stores. company is reducing its operations which will help us reduce losses in the coming months…and hopes that the proposed scheme of arrangement with Reliance will be implemented, which will be beneficial to all stakeholders,” the statement added.
Earlier, Future, which is the country’s second-largest retailer, suspended most of its online and offline operations as stores remained closed on Sunday, following Reliance’s bid to take over its flagship supermarkets for payments. missed rentals, Reuters reported.
Reliance Industries will rename stores to Future after the company failed to make payments for them to Reliance, sources told Reuters on Saturday, closing most outlets of the famed Big Bazaar chain.
On February 26, Reliance Industries had taken over operations of Future Retail stores and offered jobs to its employees.
The development came even as the Future Group, led by Kishore Biyani, is embroiled in a bitter battle with e-commerce giant Amazon in several court forums over the sale of its business to the retail arm of Reliance Industries.
Meanwhile, Reliance Retail has begun taking over the premises in which Future Retail operates its stores such as Big Bazaar and replacing them with its branded stores, sources familiar with the development said.