Reliance Retail Ventures Limited (RRVL), the retail arm of Reliance Industries, has extended the long-stop date for completion of its ₹24,713 crore deal with Future Group by another six months to 31 March next year in view of the long-drawn-out legal battle with Amazon.
“Reliance Retail Ventures Limited (RRVL) extended the timeline for Long Stop Date from September 30, 2021 to March 31, 2022, which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly owned subsidiary of RRVL,” Future Retail said in a regulatory filing.
Earlier, RRVL had extended the timeline for the Long Stop Date from March 31, 2021 to September 30, 2021, said Future Retail.
Long Stop, an established practice in mergers & 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.
Last year in August, RRVL had announced that it had acquired Future Group’s retail business across the apparel, lifestyle and grocery segment. They said they were paying close to ₹25,000 crore in exchange for some of the most iconic retail brands of our time — Big Bazaar, Nilgiris, fbb, Easyday, Central, and Brand Factory.
But just when all of us thought the deal was about to be consummated, Amazon, an investor in Future Coupons that in turn is a shareholder in Future Retail Ltd, intervened.
They were livid that Future Group was selling a sizeable part of its retail business to Reliance without their explicit consent.
In August 2019, Amazon had agreed to purchase 49% of one of Future’s unlisted firm, Future Coupons Ltd (which owns 7.3% equity in BSE-listed Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of 3 to 10 years.
After Future’s deal with RRVL, Amazon had dragged Future into arbitration at the Singapore International Arbitration Centre (SIAC).
In October, an interim award was passed by the Emergency Arbitrator (EA) in favour of the US-e-commerce major that barred 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.
Amazon and Future have also filed litigations in Indian courts, including the Supreme Court, on the matter. The SC had recently ruled in favour of Amazon by holding that the EA award was valid and enforceable under Indian laws.
Notably, the Kishore Biyani-led Future Retail Ltd, on August 28, said it has approached the top court against an order passed by the Delhi HC to maintain status quo in relation to the deal and directing it to enforce the order of the Singapore-based Emergency Arbitrator.