NEW DELHI: If mounting debt pushed India's most-haloed retailer Kishore Biyani into a corner, the unprecedented COVID-19 pandemic sealed his fate.

Putting all speculation to rest, Biyani finally and officially hung up his boots after selling his sprawling retail empire, that was built over three decades, to billionaire Mukesh Ambani-led Reliance Retail.

The rescue act will go down in the India's retail history for three reasons -- for restoring normalcy at the beleaguered Future Group, cementing the position of Reliance Retail as the undisputed leader in the organised retail segment and aiding the company bolster e-commerce to take on rival Amazon. 

In a late night notification to the stock exchange on Saturday, Reliance Retail Ven-tures Limited (RRVL), subsidiary of Reliance Industries Limited, said that it will be acquiring the retail and wholesale business, and the logistics and warehousing business from the Future Group for a lump sum aggregate consideration of Rs. 24,713 crore. 

"We are pleased to provide a home to the renowned formats and brands of Future Group as well as preserve its business ecosystem, which have played an important role in the evolution of modern retail in India. We hope to continue the growth momentum of the retail industry with our unique model of active collaboration with small merchants and kiranas as well as large consumer brands. We are committed to continue providing value to our consumers," said Isha Ambani. Director, Reliance Retail.

Post the transaction, Reliance Retail will have access to close to 1,800 stores across Future Group’s Big Bazaar, FBB, EasyDay, Central, Foodhall formats, spread in over 420 cities. As per the contours of the deal, the company will also take over the borrowings and liabilities Biyani and will "discharge the balance consideration by way of cash". 

As of September, 2019, the combined debt of Future Group’s listed companies rose to Rs.12,778 crore, from Rs.10,951 crore in March 2019. "This transaction takes into account the interest of all its stakeholders including lenders, shareholders, creditors, suppliers and employees giving continuity to all its businesses," said Kishore Biyani, Group CEO, Future Group. 

Furthermore, the acquisition is being done as part of the scheme in which Future Group will merge all its listed companies into Future Enterprises Limited. Then, it will transfer its assets of retail and wholesale undertaking to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL.

Besides, Reliance Retail has proposed to invest Rs.1,600 crore for an up to 13 per cent stake in Future Enterprises.

About Rs.1,200 crore will be for preferential issue of FEL equity shares to acquire 6.09 per cent of post-merger equity holding; and Rs.400 crore in a preferential issue of equity warrants which, upon conversion and payment of balance 75 per cent of the issue price, will result in acquiring further 7.05 per cent of FEL, the company said in a statement. 

After selling the food and fashion assets, Future Enterprises will be left with the manufacturing and distribution of FMCG goods and integrated fashion sourcing and manufacturing business and its insurance JVs with Generali and JVs with NTC Mills.