Samara Capital’s bid for Future is similar to Reliance deal: Amazon

The structure of the financing proposed by Samara Capital is in line with foreign direct investment rules as it is very similar to the acquisition of Future Group’s retail assets by Reliance Industries, Amazon told the independent directors of Future Retail.

Amazon has also asked Future Retail to submit all financial details to Samara Capital so that it can provide additional funds that will help the Kishore Biyani company avoid defaults.

In a communication to the independent directors of Future Retail, Amazon said, “Samara Capital has once again reiterated to us that they remain interested and committed to leading and advancing the term sheet dated June 30, 2020, signed between Samara , FRL and the promoters of FRL, which is considering a purchase consideration of ₹7,000 crore.

Availability of funds

“Appropriately, Samara’s term sheet provides for the acquisition of all of FRL’s retail assets, including small store formats comprising the Easy Day, Adhaar and Heritage brands, through a structure Indian owned and controlled entity run by Samara and backed by Amazon.

“The transaction contemplated in the Samara Term Sheet would ensure the availability of funds in FRL at the earliest, through an asset sale and capital injection, which would be a direct antidote to FRL’s indebtedness. “, he added.

SOS independent directors

On Friday, the independent trustees of Future Retail Ltd had asked Amazon to immediately donate ₹3,500 crore to help it repay its debts to lenders by January 29. This comes even as Amazon and FRL are at odds over the latter’s proposed merger with Retail Addiction. Although Amazon does not want FRL to partner with Reliance, FRL believes this is the only way to keep the company afloat.

Amazon has stated that it is confident that if the Independent Directors and the FRL provide immediate access to FRL information and records and cooperate fully with engagement/discussions, the transactions contemplated in Samara’s term sheet can be implemented on an expedited basis. “Furthermore, we and Samara are open to engaging with other stakeholders to find a workable solution within reach,” Amazon said, adding that FRL will have to commit not to pursue the deal with Reliance Industries.

Responding to concerns from FRL’s independent directors about whether Samara’s deal complied with FDI standards, Amazon said the structure of the proposed deal is similar to the acquisition of the retail and wholesale business. of the Future group by Reliance Retail and Fashion Lifestyle Limited.

“We understand that this entity has negligible business activities and whose parent entity Reliance Retail Ventures Limited has received at least ₹47,265 crore from various foreign investors. We also understand that it is proposed to use this amount to finance the acquisition of FRL’s retail, wholesale and logistics assets. In fact, the transaction involving FRL and the constituents of the MDA Group, namely Reliance Retail Ventures Limited and Reliance Retail and Lifestyle Fashions Limited, follows a strikingly similar structure,” Amazon said.

Published on

January 23, 2022

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