Hi, this video is important for all Future group companies and Reliance industries' shareholders.
For about 2 years, a dispute is going on between Future Group, Reliance, and Amazon.
A few days ago, we made a detailed video on it where we covered the timeline of the event in detail.
You can watch that video as well and a video link will be added in the description as well.
Today, we will give you the latest update on Reliance and Future group.
And how this will affect you as a shareholder.
So do watch this video till the end.
On Saturday, Reliance industries called off the deal worth 24713 crores for acquiring Future Group assets.
Because the secure writers of Future writers voted against this proposal.
Secure writers include listed banks and financial institutions mainly.
Because of this, a heavy sell-off is being seen in all the fUture group stocks.
Future consumer, Future supply chain, and Future lifestyle shares ate down by almost 20%
Future enterprise is locked down by 10% and Future Retail by 5%.
This impacted the Reliance industries' share price as well.
Today the RIL stock price was trading below 2.71%
There are or may be after-effects of this deal.
In the last 2 months, Reliance took over more than 900 stores of Future group.
Reliance transferred the lease name of all Future stores under itself and then sublet them.
When future stores were not able to pay rent then Reliance legally took over these stores.
Reliance took 342 large format stores like Big Bazaar, fbb, etc, and 493 small format stores like easy day and heritage stores.
Due to this takeover, the cash flow of Future was reduced by over 65%.
Overall, the financial health of the Future group is not good.
They have a lot of debt and defaulted on a few of their loan payments recently.
In recent times, Future enterprise defaulted on loan repayment of Rs.2911.51 crores.
Similarly on 1st April 2022, Future retail defaulted on loan repayment of Rs. 5322.32 crores.
As of 31st Jan 2022, Future group had a total of Rs. 28921 crores debt.
Among which majority loan is on Future retail and Future enterprises.
Bank of India approached NCLT (National Company Law Tribunal) to start the proceedings of Future Retail insolvency.
Due to the cancellation of this deal between Reliance and Future group, the worst case can be bankruptcy filed by Future.
Their shares can be delisted as well.
If you are a shareholder of Future group companies then your invested wealth can be wiped out.
If you have invested in a company and it bankrupts then firstly all assets are liquidated.
It's converted into cash.
Debt holders are paid first.
Then the remaining amount is paid to shareholders.
Generally, debt repayments are not completed.
Spo equity shareholders may lose their money.
If we talk about the 20-month-long battle between Amazon and Reliance, then Amazon's objective has been fulfilled with the cancellation of this deal.
As they didn't want the deal between Reliance and Future group.
This deal wasn't completely negative for Reliance industries.
Reliance had acquired more than 900 stores which generated more than 65% of the revenue of Future group.
It was critical for Reliance to acquire stores and customers of Future group.
The banks or financial institutions who were lenders of Future group declared their loans as NPA and started provisions against them.
As per experts, due to the poor financial health of the Future group, lenders won't be able to get all money.
In the coming time, what will happen between Reliance, future group, and amazon, should be clearly seen by you.
After the deal cancellation, there may not be a legal substantial impact.
Will Future group strike a deal with Amazon or any other giant?
Or will they file bankruptcy?
If they file for bankruptcy, how much hit the creditors will have to take, will be developed in the coming few months.
So this was a detailed update related to Reliance and Future group.
Comment and tell us if you are invested in any of the Future group stocks or not.
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Bye-bye.