Mukesh Ambani-led Reliance Retail Ventures has extended the timeline to complete its Rs 24,713 crore deal with Kishore Biyani-led Future group for six months. Future Retail, in a regulatory statement, confirmed Reliance Retail has extended the timeline for the "Long Stop Date" from March 31, 2021 to September 30, 2021. The deal has been opposed by Jeff Bezos-led Amazon, and both Future and RIL are facing legal hurdles in sealing the deal.
"Pursuant to the provisions of scheme and other transaction documents executed in relation thereto, RRVL has in exercise of the right provided thereunder, extended the timeline for 'Long Stop Date' from March 31, 2021 to September 30, 2021 which has been duly acknowledged by Reliance Retail and Fashion Lifestyle Limited, wholly-owned subsidiary of RRVL," it said.
Long Stop, an established practice in mergers and acquisition transaction, is a timeframe in which parties agree on which all the conditions precedent for a transaction need to be fulfilled and the transaction completed.
The Delhi High Court on March 21 stayed the single judge bench order restraining Future Retail and Reliance Retail from carrying forth the Rs 24,713 crore deal. Opposing the deal, Amazon contested that Kishore Biyani-helmed company violated terms of the contract it had with Amazon by signing the RIL deal. The matter has now been listed for further hearing on April 30.
The Delhi High Court also stayed the order that asked for the attachment of assets of Biyani as well as others and directed them to appear in the court on April 28. Justice JR Midha held on March 18 that Future Group wilfully violated Singapore Arbitrator's order and directed it not to take further action on the deal. The court asked them to show cause as to why they shouldn't be detained for three months in a civil prison for violating the emergency arbitrator's order. The court also imposed Rs 20 lakh fine on Future Group and its directors and said that the amount should be deposited in Prime Minister's Relief Fund to provide COVID-19 vaccines to senior citizens of Below Poverty Line (BPL) category.
Future Group announced the Rs 24,713 crore deal to sell its retail and wholesale assets to Reliance retail on August 29, 2020. However, Amazon, which had bought 49 per cent stake in Future Coupons in 2019 for Rs 1,500 crore said its deal with Future prevents Biyani's company from selling shares of Future Retail to RIL as it indirectly owned about 3.5 per cent stake in Future Retail. On October 25, 2020, the Singapore arbitration court had ruled in favour of Amazon and passed an interim order that put the Rs 24,713-crore Reliance Industries-Future deal on hold.