Reliance cancels retail deal After Future Group's secured creditors vote against it
News: Reliance Industries Ltd (RIL) said the ₹ 24,713-crore retail deal with Future group "cannot be implemented" as the secured lenders of Future Retail Ltd (FRL) voted against it. Indeed, RIL, in a stock exchange filing, said, following secured creditors - primarily banks and financial institutions - of several listed entities of Future Group's rejection of the sale agreement, the deal cannot go through. Under the ₹ 24,713 crore deal, Future Group was to sell 19 of its entities in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL), which is a wholly-owned subsidiary of RIL. Future Retail’s lenders include Union Bank of India, Bank of India, Bank of Baroda, State Bank of India, Indian Bank, Central Bank, Axis Bank and IDBI Bank as per livemint.
Views: With cancelling of this deal, we believe this would be sentimentally negative for the banks as it could lead to higher provisioning.