Thread by @finologyticker

Fight for the FUTURE.

What's happening between Amazon, Future Group and Reliance?

A thread🧵

Kishore Biyani, founder of Future Group & owner of retail business Big bazaar had an economic crisis in 2019.

The group was in huge debt of around Rs 12778 Cr.
😰

Now usually when an entity isn’t able to reduce its debt, the promoter of the company hands over the business to another entity.

Similar is the case with Future Group.
💁‍♂️

To lessen the burden, Kishore Biyani signed a deal to sell a 49% stake of Future Coupons as well as certain rights opposite Future Retail to Amazon.
💰

Future Coupons is an Unlisted entity of Future Group which had a 9.82% stake in Future Retail.

So, this meant that Amazon also Indirectly had a 4.81% stake in Future Retail.
🧐

As a part of the deal:

•Future Retail would be able to place its product on Amazon.
•Amazon had the right to buy Future Groups listed business after 3-10 years.
•If Future enters into any deal with competitors like Reliance, Walmart, Google, etc, then Amazon can refuse.
🤫

It also prohibited Future Group from selling a stake to anyone engaged in online or offline retail in food, non-food, and retail.

Do you see the business mindset of Amazon here?🧐

Apparently, it is considered as a method for Amazon to build a foothold in India's retail business.

This was all in 2019.
🤓

In 2020.

Due to lockdown, Future’s position in the market worsened.

The sales went down by 75% adding more pressure on the company.
🤒

Looking at the grim situation of Biyani, RIL thought to shake hands with Future Retail Group.

In Aug’20 RIL announced that it would buy Future’s retail, wholesale, logistics & warehousing business, through its wholly-owned subsidiary Reliance Retail Ventures for Rs 24713 Cr.
🤝

This in turn would help RIL to expand its retail venture by adding more stores and get to the pole position in 𝗜𝗻𝗱𝗶𝗮’𝘀 $1 𝘁𝗿𝗶𝗹𝗹𝗶𝗼𝗻 𝗿𝗲𝘁𝗮𝗶𝗹 𝗺𝗮𝗿𝗸𝗲𝘁.

This huge move hurt the sentiments of Amazon.
😡

It approached the Singapore International Arbitration Centre (SIAC) claiming that Future Group breached the terms of their 2019 agreement and asked that the deal between future and reliance should be called off.

😤

Responding to which SIAC issued an interim order halting the sale of Future Retail’s assets to RIL.

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In November 2020, Future Retail moves to Delhi Court against Amazon, alleging interference between its deal with RIL.

😏

Since then, Tarikh pr Tarikh is going on and both the firms are fighting in the high court, supreme court, International courts, etc.

But no result is seen.

🙄

So as of now,

➡️Amazon has 49% stake in Future Coupons.
➡️RIL wants to buy assets of Future Retail but is unable to do so because of this Court Kach-hari ke chakkar.
🤷

What will happen if AMAZON WINS

•There’s a chance it could stop Reliance from getting even bigger.

•Future group won't be able to run its operations and
due to which 30000 employees could lose their jobs.

☹️

What will happen if AMAZON LOSE

•Amazon’s loss is Future Group and RIL’s best-case scenario.

•Future Group, which has been racking up losses and defaulting on obligations, will get a shot at survival.
😌

What's in it for Reliance?

For RIL, the business deal will add 1800 outlets to the venture plus the deal of Future Group’s wholesale, logistics, and warehouse businesses.

😎

Future Retail share price has been fluctuating throughout the year due to the pending decisions by survival concerns.

One can see its financials on ticker.finology.in/company/FRETAIL and find how badly the sales and profit has been hit.

This case clearly signifies the inside battles that go on within the companies, the results of which impact the whole business’s future in which you are investing.

The answer lies in Research, Research and Research.💙

Who do you think will win?

The Supreme court has granted liberty to Future retail to go to High Court Delhi and present their case to merge with Reliance Retail.

The debt-ridden future group was unable to make lease payments for its outlets. Reliance took the lease of some stores & sublet it to Future for operations.

Now due to failure of payments, Reliance to take over 200 stores from Future group & Rebrand them.

Big moment for RIL🤔

NCLT has rejected the plea of Amazon regarding stores transfer and has allowed future group companies to take a meeting with shareholders.

The purpose is to seek approval for the composite scheme of arrangement between Future and Reliance.

#Reliance #StockMarket

Amazon said the takeover by Reliance was a sham and asked SC to put a hold on the sale of assets by Future Retail to RIL.

To which SC refuses to pass this interim order.

Both the parties have agreed to appear before the arbitration tribunal in Singapore.

#Reliance #Amazon

Reliance Future deal called OFF.

Future Retail is now headed for Bankruptcy.

Reliance can still BUY future at a cheaper price 🤯 under IBC (Insolvency and Bankruptcy Code).

#futureretail #StockMarketindia

Reliance Retail has rebranded the previous Big Bazaar outlets as "Smart Bazaar."🤯

After Future Retail's failure to make rental payments in January, Reliance Retail acquired 950 Big Bazaar stores across the nation through lease rental transfers from the property owners.

Future Retail's minority shareholders have written to the government & market regulator to express their opposition, claiming that the action is an attempt to seize the brand value of FRL.

Will RIL step back? What are your thoughts? ⤵

#Reliance #business