A company’s sustenance is decided on its strategy to accrue income and reduce loss. The financial health of a company increases its survival age. Further, the evolution with time also plays a measure role in sustaining a business. When almost every market has shifted to the virtual model and competitiveness has reached its peak, it becomes very important for the traditional market to echo in the same direction. Moreover, the Covid-19 Pandemic has also cemented the very act and has engulfed the offline businesses of many companies. One of the biggest examples of such failure is India’s largest retail chain market, Future Group, the parent company of Big Bazaar.
Future Group subsidiaries defaulted
According to a report, the three subsidiaries of Future Group, Future Enterprises, Future Consumer, and Future Lifestyle Fashions, have defaulted on their payment obligations related to their debt resolutions plans.
The total outstanding borrowings of the company are Rs 447.8 crores and the total default reported by these subsidiaries is Rs 335.08 crores. However, the company paid its interest due on the principal amount on 30 June 2022 but defaulted on the one-time principal amount. The three subsidiaries of Future Group are involved in businesses like manufacturing, branding, and logistics and own retail fashion chains like Central and Brand Factory.
The default of payment comes after the successive failure of Future Group’s businesses. Mainly engaged in the retail store market, the Future Group suffered huge losses during the Covid times.
According to Kishore Biyani, the founder of the Future Group, within 3-4 months of the complete lockdown, they suffered a loss of Rs 7000 crores. Speaking about the loss during covid lockdown he said,” the problem is rent doesn’t stop, interest doesn’t stop”. He further accepted the very fact that in coming times ‘it will not be easy for physical stores’ to do business concerning consumer behavior.
Earlier Reliance Group had struck a deal to buy 19 of Future Group’s subsidiaries’ operations in retail, wholesale, and logistics warehouse segments but the deal was later canceled by Reliance.
The strain on businesses during the lockdown forced the group to avail credit facilities from a consortium of Lender including Bank of India, Axis Bank, Bank of Baroda, Punjab National Bank, the Union Bank of India, Corporation Bank, Central Bank of India, and Andhra Bank, wherein Bank of India (BOI) is the lead lender. The lending agreement was defaulted by the group and accordingly, BOI initiated an insolvency process under section 7 of the Insolvency and Bankruptcy Code, 2016. But the insolvency proceedings have been opposed by Amazon. It has been argued by Amazon that Future Group has failed to honor the Arbitrators’ Award passed by Singapore Arbitration and is barred from disposing of its assets. So the Future Group’s future is still in the doldrums.
Big Bazaar, the subsidiary of the Future Group, is one of the favorite and most loved retail stores for millions of people. Through its largest retail stores, it brought the smart purchasing concept to the people of India. Founded in 2001, with its 300 plus stores in over 120 cities, the Big Bazaar’s shopping experience will remain in memories.
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