NCLT Extends Deadline to Complete the Insolvency Process of Future Retail Till 17 August
The National Company Law Tribunal (NCLT) has granted a 90-day extension to the Future Retail Ltd (FRL) to conclude the Corporate Insolvency Resolution Process (CIRP) of the company. The Mumbai bench of the NCLT has extended the deadline to 17 August, 2023, allowing FRL additional time for the completion of the CIRP.
The resolution process was initiated by the NCLT against FRL on 20 July, 2022, following loan default. Under the Insolvency and Bankruptcy Code, 2016 (IBC), the resolution timeframe is 330 days, including litigation time.
According to Section 12(1) of the IBC, the CIRP should be completed within 180 days from the date of initiation, with a one-time extension of 90 days granted by the NCLT. The mandatory completion time for CIRP, including any extensions or litigation periods, is 330 days.
Previously, FRL announced that it had received six bids from prospective buyers by May 15, which was the last date for submission of resolution plans or 48 companies, which were in the final list of ‘Eligible Prospective Resolution Applicants.’
Future Retail has a debt around Rs. 30,000 crores and the company is going through CIRP.
On 23 March, 2023, the resolution professional (RP) of FRL invited new expressions of interest (EoIs) after failing to attract a resolution plan in over four months. The RP invited prospective buyers to bid for the debt-ridden firm as a going concern or for specific clusters of its assets.
In spite of receiving EoI and finalising 11 prospective bidders, FRL was unable to secure a resolution plan within the extended deadlines. The Committee of Creditors provided two options in the EoI, allowing bidders to acquire Future Retail as a whole or bid for specific business clusters.
FRL operated 302 leased retail stores across 23 states and Union Territories, including prominent stores such as Big Bazaar, Easyday and Foodhall.
It was part of the 19 Future group companies operating in the retail, wholesale, logistic and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs. 24,713-crores deal announced in August 2020.
However, the lenders when came across the legal challenge raised by Amazon, rejected the takeover of the 19 Future Group companies including FRL by Reliance.