Future Lifestyle Fashions Ltd (FLFL) is seeking the consent of its members for the sale of in-store retail infra-assets, which will be used for repayment of debt and other operational liabilities.
The Future group firm is conducting an e-voting, which commences on September 14, 2022, and ends on October 13, 2022, said the postal ballot notice submitted by FLFL before the stock exchanges.
It has sought authorisation for its board to “sale, lease, rent, transfer or otherwise alienate / dispose of fixed assets (in-store retail infra assets) which are lying at non-operational stores of the Company” or in any other manner as the Board may deem fit.
This would be in one or more tranches on the terms and conditions as may be negotiated. It shall be at least equal to book value at the relevant point of time, the notice added.
The company has also sought members’ consent for the appointment of Bharat Ram as an Independent Director and Neelam Chhiber as an Independent Director.
On August 9, 2022, based on the recommendation of the Audit Committee, FLFL’s board approved sales of assets subject to requisite approvals of Lenders, debenture holders and shareholders of the Company.
“It is also proposed to utilize the amount of proceed from the above proposal for repayment of debt and other operational liabilities subject to the approval of the Lenders. This would help the Company to reduce its debt considerably,” said FLFL.
The Board believes that with the remaining assets, FLFL will be able to continue its business operations.
FLFL has in-house retail chains Central and Brand Factory, exclusive brand outlets (EBOs) and other multi-brand outlets (MBOs of nearly a dozen apparel labels, including Lee Copper, Champion, aLL, Indigo Nation, Giovani, John Miller, Scullers, Converse and Urbana in its portfolio.
Last week, FLFL said it received a three-month extension from the Registrar of Companies for holding its Annual General Meeting.
On August 27, while declaring its result for the first quarter of FY23, FLFL had said under the One Time Restructuring (OTR) plan with the lenders, it has debt servicing obligations aggregating to Rs 422.11 crore within the next 12 months.
FLFL further said its “current liabilities exceeded its current assets (including assets held for sale) by Rs 1,180.66 crore as on March 31, 2022.
Also, it has already defaulted on repayment of Rs 335.08 crore of principal amount on loans from banks as on June 30, 2022.
FLFL was part of 19 group companies operating in the retail, wholesale, logistics and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713-crore deal announced in August 2020.
The deal was called off by Reliance Industries in April after it failed to get lenders’ support.
Following this, the Kishore Biyani-led retail empire is in deep financial trouble.
