Indian supermarket operator Future Retail Ltd. approved a debt resolution plan that eases some immediate concerns as a legal battle with partner Amazon.com Inc. threatens to delay an asset sale to Reliance Industries Ltd.
Future Retail’s board agreed to a proposition to restructure its secured bank debt and three rupee-denominated bonds, according to an exchange filing Saturday. The plan, which was accepted by lenders, is subject to approval by a committee formed by the central bank and exchanges.
Failure to secure lenders’ approval for the restructuring plan would have caused “immediate liquidity pressure,” Fitch Ratings said in a note Friday before the announcement. The rating company said it would evaluate the deal after approval from lenders to see if it constitutes a distressed debt exchange.
There are signs that the broader concerns about Future Retail’s tussle with Amazon may continue to weigh on the debt. India’s top court scheduled a final hearing in the matter to May 4 and said it will decide the case for once and for all. Read more background here: India High Court Lifts Freeze on Future Retail, Founders’ Assets
Future Retail’s dollar bonds due 2025, which aren’t part of the resolution plan, dropped about 0.2 cents on the dollar to 79.9, according to data compiled by Bloomberg. The Mumbai-based company’s shares were down about 0.2% on Monday, while India’s benchmark Sensex index fell about 2.4%
