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By Aditya Kalra
NEW DELHI (Reuters) -India’s prime retailer, Reliance, will tackle at the least 200 Future Retail shops after the corporate didn’t make lease funds for them to Reliance, two individuals with direct data of the matter instructed Reuters on Saturday.
Since 2020, Reliance has failed to shut a $3.4 billion deal to accumulate the retail belongings of Future, whose accomplice Amazon.com Inc (NASDAQ:) has efficiently blocked the transaction by citing violation of some contracts. Future denies any wrongdoing.
The takeover of shops by Reliance alerts Future’s worsening monetary state of affairs. Future in January challenged its lenders in India’s Supreme Court docket to keep away from going through insolvency proceedings over lacking financial institution funds, citing its dispute with Amazon.
Future – which has greater than 1,700 shops, together with common Massive Bazaar shops – has been unable to make lease funds for a few of its shops. In consequence, Reliance transferred the leases of some shops to its identify and sublet them to Future to function the shops, the sources stated.
As Future didn’t make the funds, Reliance has determined to run and rebrand about 200 shops that will in any other case be closed, they stated.
In a press release to Indian inventory exchanges, Future stated “termination notices have been obtained for vital variety of shops” to which it’ll “not have entry.”
The corporate is “cutting down its operations which is able to assist us in lowering losses within the coming months,” it stated, with out mentioning Reliance’s plan to take over many such shops.
Reliance and Amazon didn’t reply to requests for remark.
“Over 200 shops will transition to Reliance shops,” stated one supply, who requested to not be named as the small print of the plan weren’t public.
In a letter seen by Reuters, Reliance supplied Future workers at these shops new jobs on the identical phrases. “We welcome you to hitch our group,” it reads.
Amazon has argued that Future violated the phrases of a 2019 deal the businesses signed when the U.S. big invested $200 million in a Future unit. Amazon’s place has been backed by a Singapore arbitrator and Indian courts.
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