Reliance Retail and 6 others submit EoIs for future supply chain solutions

One City Infrastructure, Globe Ecologistics, Shanti GD Ispat & Power, Camions Logistics Solutions, Tatkal Loan India and Sugna Metals have also submitted their EoIs for the company. These companies are asked to submit financial offers for the company once their EoI has been approved by a settlement expert and lenders.

Future Group’s warehousing and logistics requirements are managed by FSC and were once considered critical to the Group’s operations.

During peak periods, the company’s inventory management tools enable group units to monitor, manage and control inventory levels. The large group units such as Future Retail (FRL) and Future Lifestyle have warehouses at various locations in each zone which supply the regional warehouse which in turn is used to provide services to the stores at all locations before Future group companies went bankrupt.

RRVL had made an offer to acquire the entire Future Group business for Rs 24,713 crore in August 2020. However, the transaction fell through after American retail giant Amazon launched a legal battle against it. Later, the lenders filed for bankruptcy court against all Future Group companies.

RRVL had also expressed an interest in acquiring FRL, the group’s flagship company, but later withdrew from an offer.

A Reliance spokesman declined to comment.

In December 2019, Nippon Express (South Asia and Oceania), a subsidiary of Japan’s Nippon Express, acquired a 22 percent stake in FSC through a mix of primary and secondary issuance.

Through this partnership, Nippon Express and FSC wanted to leverage synergies due to their complementary skills and service offerings and gain a stronger foothold in India’s large and growing logistics sector.

The investment would have enabled Nippon Express and FSC to expand and explore logistics needs across all sectors of the Indian market. The deal would also help the Indian company gain access to Nippon Express’ Japanese multinational customers to explore new business opportunities in India, particularly for third-party and express logistics operations.

However, within a few months, the pandemic swept the world and almost all shops across India closed. Branch closures and litigation resulted in a loss of cash flow for all Future Group companies, which defaulted on bank loans.

In the case of FRL, two major conglomerates RRVL and a joint venture Adani Group were eliminated, clouding prospects for a strong recovery.

The highest bid for FRL was placed by SpaceMantra. The other five companies that submitted bids included Pinnacleair, Palgun Tech LLC, Lehar Solutions, Goodwill Furniture and Sarvabhishta E-Waste Management.

Future group companies owe nearly 19,000 crore rupees.

The lenders have been in talks with the National Asset Reconstruction Company to sell the loans, but no announcement has been made as of yet.

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