The National Company Law Tribunal (NCLT) allowed Reliance Retail Ventures Ltd (RRVL)
and Reliance Retail & Fashion Lifestyles Ltd (RRFLL) to hold extraordinary general meetings
(EGMs) of their shareholders and creditors to acquire Future Group’s businesses.
The NCLT said the objections raised by American retail giant Amazon were premature and
could be dealt with later.
On September 28, the NCLT had allowed six Future Group companies to hold meetings of
their respective shareholders and creditors. Lawyers said the NCLT permission to hold the
meeting was a preparatory step. The Supreme Court will take the final decision.
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In August last year, RRVL, a subsidiary of Reliance Industries, announced it was acquiring
the retail, wholesale, logistics and warehousing businesses, including debt, from Future
Group for Rs 24,713 crore.
According to the regulations, all mergers and acquisitions require the court’s approval and
hence both Reliance companies had approached the NCLT for its clearance.
The NCLT’s final clearance of the deal will be subject to the Supreme Court’s order, where
both Future Retail, a Future Group company, and Amazon are litigating.
Reliance Retail and Future Group announced their transaction in August last year, Amazon,
which holds 49 per cent in a holding company of Future Retail, objected to the deal, saying
the transaction breached its non-compete agreement with the Future Group promoters.
Future Retail later moved the Delhi High Court, which held there was no arbitration
agreement between Amazon and the company. Amazon moved the division bench of the
Delhi High Court, which ordered a status quo. The matter is pending in the Supreme Court,
which has asked both parties to wait for the final order from the SIAC.
According to the plan, various Future Group companies — Future Retail, Future Consumers,
Future Supply Chain Solutions, Future Lifestyle Fashion, Future Brands, and Future Market
Network — will first merge into Future Enterprises.
Subsequently, the retail and wholesale undertaking will be transferred to RRVL and RRFLL,
a wholly-owned subsidiary of RRVL. At the same time, the logistics and warehousing
undertaking will be transferred to RRVL. Future Enterprises will have left with a few
businesses, including two insurance joint ventures.
The retail and wholesale business includes Big Bazaar, fbb, Food hall, Easyday, Nilgiris, and
Central and Brand Factory chains.
