Future Retail stares at liquidation after CoC rejects Space Mantra’s offer
Future Retail is on the brink of liquidation after the committee of creditors (CoC) rejected the resolution plan submitted by Space Mantra. In an exchange filing, Future Retail said that Space Mantra’s bid was rejected by the CoC on September 30, 2023. The company added that the next steps would be taken in accordance with the Insolvency and Bankruptcy Code 2016. Under IBC, if no resolution plan is approved by the CoC, the next step is to liquidate the insolvent company.
According to media reports, the resolution professional in the case had proposed inviting bids again after Space Mantra’s resolution plan was rejected by the CoC. However, lenders were not in favour of the move and they rejected the proposal.
Space Mantra, which has been founded by former NBCC chairman and managing director Anoop Kumar Mittal, had submitted a resolution plan providing for Rs 550 crore payout to creditors. However, this bid was rejected by the lenders, who have total admitted claims of Rs 19,773 crore.
It is to be mentioned here that as many as 49 companies had shown interest in acquiring Future Retail through the Corporate Insolvency Resolution Process (CIRP) in April this year, when the resolution professional had invited bids for the company. Among the 49 firms, Reliance Retail Ventures, Adani Group-backed April Moon Retail, Jindal Power, UK-based WHSmith Travel are some of the big firms vying for Future Retail, which owned brands like Big Bazaar.
Insolvency proceedings against the company began on June 20, 2022, after the Mumbai bench of the National Company Law Tribunal (NCLT) admitted the insolvency plea filed by Bank of India against the company.
The liquidation of FRL would be a major blow to the Indian retail sector. The company is one of the largest retailers in India, with over 1,700 stores across the country.
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