Over Rs 20,000 Crore Loans Of Future Group May Get Classified As NPA: Report

As the dues are well past the 90-day deadline, more than Rs 20,000 crore of loans to Kishore Biyani’s Future Group may slip into a watch-list or be classified as a non-performing asset (NPA).

Future Retail, which houses the group’s main retail brands like Big Bazaar, and Future Lifestyle Fashions are the two main debt laden companies, holding about Rs 20,000 crore of loans.

The owner of the Big Bazaar, Brand Factory and Central retailing formats is technically in default and with the Supreme Court moratorium no longer available, banks will have to mark the exposure as a stressed loan on 1 April, reports The Economic Times.

“There is a resolution plan underway and banks have time until April 26 to approve it. However, there is no standstill in classifying these loans as NPAs. If the restructuring goes through, banks may well reverse provisions, but until then loans may be classified as NPAs,” a senior bank executive said.

“The restructuring is under process and banks are working out the treatment of the debt lenders and investors. Banks can write back the provisions they make if they classify these loans as NPAs whenever the plan receives approval from the Kamath committee,” said a second banking executive.

After the launch of JioMart last year, in the middle of the Covid-19-forced lockdown, Reliance made the next big move by acquiring a cash-starved Future Group.

In the deal, the Future Group was selling its retail, wholesale, logistics, and warehousing businesses to the Reliance Group.

Following the announcement, Amazon, in October, accused Future Group of breaching an agreement with them. In 2019, Future Retail had signed a deal with Amazon where the latter acquired a 49 per cent stake in Future Coupons, the promoter firm of Future Retail in a deal of nearly Rs 2,000 crore.

Amazon objected to the deal and approached the arbitration court in Singapore, which said it should be suspended pending a final decision.