The Supreme Court's ruling on Friday in favour of the US-based ecommerce giant Amazon in the Reliance Retail-Future Retail merger deal case has set lenders of the Kishore Biyani-owned company worried about a bigger haircut on restructured loans.
Upholding the the Singapore's emergency arbitrator’s order restraining Future Group from going ahead with its Rs 24,713-crore deal with Reliance Retail, the apex court said that the order is enforceable in India and the Indian Arbitration laws also allowed it.
According to a report by Business Standard, if the merger deal does not go through, the working of restructuring of loans would be under strain, forcing banks to take larger haircuts than envisaged earlier.
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There is concern over a bigger haircut on restructured loans, bankers told the publication.
Future Retail Ltd on Friday said it intends to pursue "all available avenues" to conclude its Rs 24,731-crore deal with Reliance Industries and banks would monitor steps the company's promoters take and assess implications for the financial profile.
Future Retail has completed the one-time restructuring of its onshore debt of about Rs 10,200 crore that includes extending the maturity of its term loans and other borrowings. The restructuring has been approved under the resolution framework. The group’s debt exposure is more than Rs 20,000 crore, a senior public sector bank executive told the publication.
According to the report, the lenders are also mulling an option to take the Future Group to bankruptcy court.
(With PTI inputs)