Future Retail files an appeal with the Supreme Court in response to the lenders' insolvency notification, requesting more time.

Future Retail is running out of time, as the Kishore Biyani-backed retailer has petitioned the Supreme Court for an extension on the January 29 deadline to repay Rs 3,500 crore in debt instalments to lenders.

TIME'S RACE IN THE FUTURE

Future, India's second-largest retailer, has been unable to execute a USD 3.4 billion retail asset transfer to a competitor since 2020 owing to a dispute with Amazon, which claims the business violated specific non-compete contractual agreements the two sides agreed. According to Reuters, Future denies any wrongdoing.

Future warned Indian stock exchanges in January that it would be unable to pay 35 billion rupees (USD 470 million) to its lenders on December 31 because it would be unable to sell some small stores owing to the Amazon issue. It had wanted to fix the matter within a 30-day grace period.

After failing to do so, Future urged the Supreme Court in a new court filing on Tuesday to order its lenders and the country's central bank to allow further time to complete the transaction and avoid being categorised as a defaulter.

THE MOST RECENT LEGAL CHALLENGE

Future warned Indian stock exchanges in January that it would be unable to pay 35 billion rupees (USD 470 million) to its lenders on December 31 because it would be unable to sell some small stores owing to the Amazon issue. It had wanted to fix the matter within a 30-day grace period.

After failing to do so, Future urged the Supreme Court in a new court filing on Tuesday to order its lenders and the country's central bank to allow further time to complete the transaction and avoid being categorised as a defaulter.

THE MOST RECENT LEGAL CHALLENGE

Future's latest court battle reflects the retail group's rising desperation, as it has stated that it fears insolvency and the loss of more than 27,000 jobs at its retail segment if its plan to sell assets to competitor Reliance Industries fails.

Future's petition also included a letter from the State Bank of India (SBI) to the company on January 15, warning it that if it does not pay the sum owed to lenders, it may face legal action.

According to SBI's letter, this might entail "instituting insolvency processes" against Future in accordance with Indian law.

According to the lawsuit, Future's major retail business, Future Retail, urged judges to overturn such default notifications from its lenders.

UNIQUE POSITION

Future "finds itself in a strange position where it seeks to comply" with its loan commitments, but "the litigation with Amazon effectively prevents it from doing so," Future's attorney Yugandhara Pawar Jha said in the petition.

Amazon claims that Future broke the terms of a 2019 agreement in which the US company invested USD 200 million in a Future unit. So far, Singapore arbitration and Indian courts have supported the US company's argument.

Future operates 1,700 stores across the country. There are approximately 900 small-sized establishments among them, with the remainder being large-format hypermarkets and fashion retailers.