Fresh bids invited for Future Retail; 7 April last date for submitting EoIs

After failing to receive any resolution plans despite multiple extension of dates for submission of expression of interest (the last such deadline was 20 February) for Future Retail, resolution professional Vijay Kumar V Iyer has once again invited EOIs for the erstwhile Kishore Biyani-owned company.

As per the new schedules, the last date for submission of EOI is now 7 April 2023. The RP will issue the provisional list of prospective resolution applicants (PRAs) on 8 April, and the final list will be issued by 13 April after verifying any objections to the provisional list of PRAs. The deadline for PRAs to submits their resolution plan is 15 May 2023.

The Mumbai bench of the National Company Law Tribunal (NCLT) on 20 June 2022 admitted Bank of India’s plea to initiate corporate insolvency resolution process (CIRP) against Future Retail for defaulting on a payment of Rs 856 crore. 

Future Retail owes Rs 19,000 crore to banks to financial institutions with over Rs 4,000 crore dues to Bank of New York Mellon.

Information on assets of Future Retail

During financial year 2020-21, Future Retail had a pan India presence with 1,308 stores in 397 cities across various formats/ stores. The fixed assets of the Corporate Debtor largely comprise of Furniture and Fixtures and Leasehold Improvements at various leased retail stores. As per the information provided by Future Retail, as on the Insolvency Commencement Date (July 20, 2022), the Corporate Debtor had access to 302 leased retail stores spread across 23 states and union territories consisting of 30 large format stores (Big Bazaar and FBB stores) and 272 small format stores.

Installed capacity of main products/ services

Future Retail is engaged in the business of retailing of food, fashion, household & consumer products through departmental and neighborhood stores under various formats across the country. As per the information provided by the Corporate Debtor, as on the Insolvency Commencement Date (July 20, 2022), the Corporate Debtor had 302 retail stores, which were taken on lease and are spread across 23 states and union territories. These consist of 30 large format stores (Big Bazaar and FBB stores) with an average store size of c. 41,000 sq. ft. and 272 small format stores with an average store size of c, 2,400 sq. ft. The count of stores does not include Foodhall and Aadhaar format stores. Foodhall brand and fixed assets deployed at Foodhall stores are owned by FRL, and the Foodhall stores are currently being operated by a step-down subsidiary of FRL under agreement with FRL while Aadhaar is now operated by another company of the Future group since prior to insolvency commencement date (ICD). Access to many stores of the Corporate Debtor is not available as on date, on account of challenges being faced with the landlords or on account of lack of availability of information.

Quantity and value of main products/ services sold in last financial year

As per Annual Report for financial year 2020-21, revenue from operations for FY2020-21 amounted to Rs 6,261.04 crores. Sale of products contributed Rs 6,108.28 crores. As per the Un-audited Financial Results for the Quarter and Nine months ended December 31, 2021, revenue from operations for nine months ended December 31, 2021 amounted to Rs 6,538.75 crores. With the limited information available with the Corporate Debtor currently, and lack of access to the IT systems, the quantity of the products sold during the last financial year 2021-22 is in the process of being determined. The quantity and value of the inventory is also in the process of being determined and shall be uploaded on the VDR as and when available.

Number of Employees/ Workmen

As per the Annual Report for financial year 2020-21, the Corporate Debtor had 21,839 employees located at head office, zonal offices, retail stores, design houses and data-centers across the country. However, basis details received from the Corporate Debtor, we have been informed that as of end of February 2023, the Corporate Debtor has 2,324 employees.

Other Notable Assets

Land Parcels: Land parcel of 40.34 acres, located in Chittor, Andhra Pradesh and Land parcel of 4.61 acres, located in Siddhipet, Telangana Brands / Trademarks Basis details received from the Corporate Debtor, we have been informed that Future Retail Limited has 311 registered trademarks.

Major trademarks owned by Future Retail Limited include Big Bazaar, FBB, E-Zone, Easy Day, Foodhall, Heritage Fresh etc. Additionally, rights to 507 registered trademarks were vested with FRL upon merger of Hypercity Retail India Limited with the Corporate Debtor.

Inventory & Property, Plant & Equipment (PPE) at stores and warehouses Inventory and PPE are located at various non-operational FRL stores and at third party warehouses across India. Additionally, inventory and PPE of 800+ stores which were with FRL up to sometime in February 2022 are currently stored at third party warehouses across India. Listing of inventory and PPE of these 800+ stores, as procured by the RP from third parties, shall be made available to the PRAs in the VDR.

Vehicles: Basis details received from the Corporate Debtor, we have been informed that 10 vehicles are owned by the Corporate Debtor– of which 5 vehicles are in Delhi, 2 vehicles are in Mumbai and the remaining 3 vehicles are in Kolkata.

Tax Losses: The Corporate Debtor has significant carry forward business losses and unabsorbed depreciation in excess of Rs 1,600 crores as of FY2020-21. This number is likely to further increase significantly on account of losses in FY2021-22 and thereafter.

Subsidiaries:

WHSmith Business: Travel News Service India (India) Private Limited (TNSI) is a wholly owned subsidiary of FRL has the master franchise in India for operating retail outlets under the brand name WHSmith, licensed from WH Smith Travel Limited. Its product portfolio includes books, magazines, confectioneries, drinks, handicrafts, journey solution and toys.

The stores are located across major airports in India, private universities and the Delhi Metro stations. The stores at airports and private universities are operated by TNSI. TNSI also has 10 warehouses that are located within close proximity to airports. TNSI has two subsidiaries, TNSI Retail Private Limited (TNSI Retail), which is engaged in retail outlet of WHSmith at Delhi Metro stations and Welcome Retail Private Limited which holds the master concessionaire agreement with Airport authority of India for airports at Kolkata and Indore.

Foodhall Business: Foodhall is a premium lifestyle food chain that offers an array of fresh, global products that capture significant spends of affluent households. It offers a wide range of Indian and international products including packaged foods, staples, breads, snacks, desserts and savories and premium kitchen accessories etc, its biggest strength being operating a global sourcing network. At present, there are 7 operational Foodhall stores in India – 3 in Mumbai , 3 in Delhi/NCR and 1 in Bengaluru.

FRL owns the Foodhall brand and fixed assets deployed at Foodhall stores. TNSI Retail has entered into a franchisee agreement with FRL under which the brand has been licensed and furniture & fixtures are given on lease by FRL on a revenue share model to TNSI Retail.

Also See: Resolution professional detects Rs 15,000 cr fraudulent transactions in Future Retail