In what appears a bid for a patch-up, Amazon, which otherwise looks comfortably placed in view of international laws, has offered financial assistance to cash-strapped Future Retail NSE -1.77 % Ltd, amid a legal battle to block the Rs 25,000-crore Reliance-Future deal. “We reiterate our willingness and ability to assist FRL in addressing any financial concerns of FRL, within the framework of the agreements, including the solution proposed in the term sheet between Samara Capital and FRL, which contemplated an infusion of [Rs 7,000 crore] in FRL,” Amazon wrote in a letter sent to Future Retail’s independent directors on Wednesday.
In the letter, Amazon also warned Future Retail that it was prohibited from “directly or indirectly taking any steps to transfer, dispose (of), alienate or encumber FRL’s retail assets” without the American company’s consent.
Any sale of small-format stores without Amazon’s consent “would be in violation of the injunctions which continue to operate and are binding on FRL and directors of FRL, including the independent directors of FRL”, Amazon said in the letter, adding that it was “more than willing” to explore effective solutions to assist Future Retail.
Earlier this month, media reported that lenders of Future Retail were likely to seek buyers for its small-format stores to recover dues worth Rs 3,494.5 crore after it failed to honour payments scheduled on 31 December.
Future Retail and Amazon have been battling in court over the nearly Rs 25,000 crore Reliance-Future deal — announced in August 2020 — for more than a year. Amazon has long argued that Future violated the terms of their 2019 deal in deciding to sell retail assets to Reliance. Amazon’s lawyers have on many occasions said that the US-based etailer had lined up Samara Capital to fund Future Retail and the private equity firm had even signed a term sheet with the Indian retailer before Reliance Retail stepped into the fray.
Amazon swiftly moved the Singapore International Arbitration Centre (SIAC) in October 2020 against Future Group’s plans to sell its assets to Reliance Retail for Rs 25,000 crore and received an injunction against the deal from an emergency arbitrator.
While the SIAC ruling was held effective in India, the Delhi High Court earlier this month stayed arbitration proceedings between the two companies after the Competition Commission of India suspended its approval of the Amazon-Future Coupons deal late last month. Amazon has challenged the ruling but the arbitration has been put on hold for now.