Vote on Space Mantra's Future Retail bid likely soon
Future Retail (FRL) have put to vote the sole plan to take over the company by Space Mantra, promoted by former NBCC chairman Anoop Kumar Mittal, even as they are uncomfortable with the poor offer for what was once a leader in India's retail market.
On Thursday, the committee of creditors (CoC) extended the timeline for voting to September 7 from August 31 as some lenders wanted more time to get internal approvals from their top management. Lenders are closely weighing their options with some preferring liquidation of the company rather than assigning the debt for next to nothing.
«The offer is very close to the liquidation value and some lenders are uncomfortable with selling it so cheap but our choices are limited.
One school of thought is that this is the only bid on the table and if we go for liquidation it will delay the process further and also add to the insolvency resolution costs because it will take six to nine months more. But some others are of the view that selling it so cheaply and that too based on payments to be received later could invoke questions later.
Everyone is weighing their choices,» said a person familiar with the process.
Space Mantra's offer of ₹553 crore is 2.79% of the total outstanding dues of ₹19,773 crore owed to financial creditors. The company has submitted a bank guarantee of 20% of its bid value (₹110 crore) which can be encashed if it fails to fulfil its resolution plan.
It has promised to start paying back lenders after 90 days after getting NCLT's approval for its plans.
Space Mantra was the only bidder seeking to take over the whole of Future Retail, among 48 expressions of interest received by the resolution professional (RP), ET had reported in May.
