Lenders to troubled retail chain Future Retail will meet on Saturday to discuss next steps, including legal options, after the company sought 10 days’ time from the Supreme Court to work out a settlement.
While senior bank executives have been reviewing the case on a regular basis, Saturday’s meeting assumes significance in light of the Supreme Court hearing, banking sources said.
Executives of the Bank of India said in the media interaction after the December quarter results that the account was already being treated as a non-performing asset (NPA). The bank has proactively made 47 per cent provisioning, which is higher than requirement of 40 per cent. Its exposure is about Rs 1,047 crore.
BoI executives explained the options available before lenders, include invoking provisions of the bankruptcy law. The other option available is to invoke the personal guarantees provided for loans, the bank’s executives said.
Lenders will consider the company’s proposal if it comes up with a clear plan for repayment and not proceed with legal recourse till clarity emerges on proceedings in the Supreme Court.
On Thursday, the consortium of 27 banks told the Supreme Court that the money lent to Future Retail belonged to the depositors. And to safeguard the “public interest”, the entire assets of FRL can be subjected to open bids by Amazon and Reliance with a reserve price of Rs 17,000 crore.
A Bench headed by Chief Justice NV Ramana is hearing FRL’s plea. The court adjourned the hearing at the request of the company.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU