Reliance Retail extends deadline to complete Rs 24,713 crore deal with Future Group

NEW DELHI: Reliance Retail Ventures, the retail arm of Reliance Industries, has extended the timeline for six months to complete its Rs 24,713 crore deal with Kishore Biyani-led future group to buy its retail and wholesale business.

Reliance Retail Ventures Ltd (RRVL) has extended the timeline for the "Long Stop Date" from March 31, 2021 to September 30, 2021, said a regulatory filing by Future Retail.

"Pursuant to the provisions of scheme and other transaction documents executed in relation thereto, RRVL has in exercise of the right provided thereunder, extended the timeline for 'Long Stop Date' from March 31, 2021 to September 30, 2021 which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly-owned subsidiary of RRVL," it said.

Long Stop, an established practice in mergers and acquisition transaction, is a timeframe in which parties agree on which all the conditions precedent for a transaction need to be fulfilled and the transaction completed.

The deal, which is contested by Amazon, is facing legal hurdles and a decision from the Supreme Court is pending over the petition filed by the e-commerce major.

The Future-Reliance deal, which was announced on August 29, 2020, has already received clearance from regulators such as CCI, SEBI and bourses, and the scheme of arrangement is now awaiting the nod from the NCLT and shareholders.

Though the Supreme Court has granted a go-ahead to the National Company Law Tribunal (NCLT) for its proceedings but has asked it not to pass any final order sanctioning the scheme. The NCLT has reserved its order over the scheme of arrangement in which all the Future Group's retail assets would be consolidated under Future Enterprises Ltd and then would be transferred to RRVL through sale.

Last month, a Single Member Bench of the Delhi High Court had directed the Future Group to stay the deal. However, this was challenged by the Future Group before the Division Bench of the Delhi High Court, which stayed the order of the Single Member bench.

Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC), arguing that the latter had violated their contract by entering into the deal with rival Reliance.

Amazon had invested in Future Coupons in August 2019 with an option of buying into the flagship Future Retail after a period of three to 10 years.

On October 25, 2020, an interim award was passed in favour of Amazon with a single-judge bench of V K Rajah barring Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.