samara: Amazon asks Future Retail to provide financial details to Samara Capital for expedited due diligence

NEW DELHI: Amazon has asked Future Retail (FRL) to provide financial details to Samara Capital for expedited due diligence as it wants the private equity player to inject Rs 7,000 crore into the Kishore Biyani promoted company.
The cash-strapped retailer, embroiled in a nearly two-year legal battle with Amazon, is eyeing a default as the grace period to pay Rs 3,500 crore to its lenders ends on January 29. Its total liability to its lenders stands at Rs 9,119 crore for interest and principal repayments till March 2022.
“The transaction contemplated in the Samara Term Sheet would ensure the availability of funds in FRL at the earliest, through an asset sale and capital injection, which would be a direct antidote to FRL’s indebtedness. “, wrote Amazon in the letter dated January 22. Samara and Amazon are confident that if the independent administrators and FRL provide immediate access to FRL information and records and fully cooperate in engagement/discussions, the transactions contemplated in Samara’s term sheet can be implemented. in an accelerated way.
The term sheet dated June 30, 2020 was signed between Samara, FRL and the promoters of FRL. It provides for the acquisition of all of FRL’s retail assets, for Rs 7,000 crore, including “small store formats” featuring the “Easy Day”, “Adhaar” and “Heritage” brands, through of an Indian owned and controlled entity structure headed by Samara. and supported by Amazon, according to the American e-tailer.
“The term sheet was rejected. Amazon’s willingness to help FRL is a game of smoke and mirrors. Reliance has offered Rs 25,000 crore and the online retailer is only offering Rs 7,000 crore. They think we are children. We will not accept it,” Ravindra Dhariwal, one of FRL’s three independent trustees, told TOI.
Amazon further compared the acquisition structure of Samara-Amazon with that of Reliance Retail and Fashion Lifestyle which announced its decision to buy FRL in August 2020 for Rs 25,000 crore, a proposed deal which Amazon tried to block . Amazon, which claims to have protective rights over FRL due to its 49% purchase in Future Coupons, a Future Group company, has argued in various courts that the Future-Reliance deal violates the terms of its contract with FRL. and Reliance is a “restricted party”.
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