US e-commerce giant Amazon is preparing a bailout plan for Future Retail Ltd (FRL) in case the Singapore International Arbitration Centre (SIAC) rules against the merger deal with Reliance Retail, Mint reported quoting sources.
SIAC has concluded the final hearing over Amazon's plea and is expected to give a final judgement in the matter later this month, the report said.
DH couldn't verify independently the report.
Amazon and FRL are embroiled in a bitter legal fight over the deal and the US-based firm has sought in the apex court that the EA award was valid and enforceable. Last week, the Supreme Court ruled in favour of Amazon’s bid to block the Rs 24,731 crore deal that would give the Mukesh Ambani control over an Indian supermarket chain.
“Future Retail will immediately need a Rs 5,000-5,500 crore funding line to avoid defaults to bondholders and bank loans that can be provided by Amazon through an alternative investment fund (AIF) route... Due to the accumulation of dues, there is a cash deficit, and this deficit is a result of an asset-liability mismatch, but ultimately it depends on whether Future group takes up the offer," a source told the publication.
“Amazon eventually plans to bring in more investors, including private equity funds, to participate in equity infusion in the Kishore Biyani-led group, which faces the bleak prospect of bankruptcy if the SIAC ruling goes against it," another source said.
Meanwhile, Future Group said that the company “intends to pursue all available avenues to conclude the deal” with Reliance.
Future Group could appeal the Singapore arbitration court’s decision or file a review petition with the Supreme Court.
Amazon went to the Singapore arbitration court last year, accusing the Indian retailer of Future Group of violating that contract when it agreed to sell its wholesale, warehousing, logistics and other retail assets to Ambani’s conglomerate.
(With Bloomberg/agency inputs)
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