Future directors turn down Amazon's offer

New Delhi: Independent directors of Future Retail Ltd (FRL) have turned down Amazon's offer of financial support to the company through a deal with private equity firm Samara Capital, saying the offer is "plainly an attempt to buy the FRL assets on the cheap".

FRL's independent directors had last week asked Amazon if the e-commerce giant was willing to give a long-term loan to avoid default on repayment of Rs 3,500 crore loan due on January 29. Amazon replied that it was willing to financially assist Future Retail through the Samara Capital deal but the retailer must shelve Rs 24,713 crore deal with Reliance.

The independent directors of FRL, in a letter on Tuesday, said it is now clear that Amazon's letters were "just a game of smoke and mirrors".

"Accordingly, we will not be assessing any proposals from you, until an actual solution which meets FRL's capital requirements and addresses concerns of its stakeholders, in a legally-compliant manner, is tabled," said the letter, a copy of which was seen by PTI. Amazon had told FRL that Samara Capital remains interested in buying out the debt-strapped retailer's businesses such as Big Bazaar for Rs 7,000 crore, and had asked FRL to provide its financial details to Samara Capital for the private equity fund to conduct expedited due diligence. The independent directors said the price of Rs 7,000 crore is "significantly below the amount needed to discharge FRL's total liabilities".

"...FRL's Bank liabilities and part of the committed vendors payments till just March 2022 itself aggregate to Rs 12,027.31 crores. When seen in the context of the financials of the Reliance transaction by way of the Scheme of Arrangement, your offer is plainly an attempt to buy the FRL assets on the cheap," the letter stated.