Future Retail’s board has agreed to a debt resolution plan on restructuring its secured bank debt and three rupee bonds as per a filing with the BSE. “The debt burden has become disproportionate relative to the cashflow generated by the company owing to the multiple lockdowns since the pandemic surfaced, posing significant financial stability risks to the business,” Future Retail said in the filing. They added, “It may be noted that 5.6% US Senior Secured notes 2025 issued by the Company and non-convertible debentures issued by the Company to certain trusts are not part of the resolution plan”. Rating agency Fitch on Friday affirmed Future Retail at C and removed them from Rating Watch Positive (RWP). Fitch separately added that they “will downgrade FRL’s Long-Term IDR to ‘RD’ (Restricted Default) if, in our review, the final agreed terms of the OTR (one time restructuring) amount to a DDE (Distressed Debt Exchange)”. The debt resolution comes at a time when the company is stuck in a battle with Amazon on Reliance Retail’s acquisition of Future Retail.

Future Retail’s USD 5.6% 2025 is currently up 0.4 to 82.94 cents on the dollar yielding 11.3%.

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