RIL takes control of around 200 FRL stores

New Delhi: Billionaire Mukesh Ambani's Reliance Industries Ltd has taken over the operations of at least 200 stores of Future Retail Ltd (FRL) and has offered jobs to its employees after the Kishore Biyani-led group failed to make lease payments to landlords, sources said on Saturday.

Reliance Retail, the retail arm of the oil-to-telecom conglomerate, had in August 2020 agreed to take over the retail and logistics business of the Future Group for Rs 24,713 crore but the deal couldnt be closed as Future's warring partner Amazon went to courts citing violation of some contracts. Future denies any wrongdoing.

Sources said several landlords had approached Reliance as FRL, which is neck deep in losses, was unable to pay rent.

Future has more than 1,700 outlets, including the popular Big Bazaar stories, and has not made lease payments for some of its outlets. Facing closure, Reliance transferred the leases of some stores to its step-down subsidiary, RRVL and sublet them to Future to operate the stores, the sources said.

It has since started rebranding the stores and offered to take all employees employed there on its payroll, they added.

In addition, a majority of inventory at these stores was being supplied by Reliance Jiomart as a cash-strapped FRL could not clear dues to existing suppliers. Reliance will likely replace Big Bazaar signages and branding from these stores with its own brand.

Amazon has argued that Future violated the terms of a 2019 deal the companies signed when the US e-commerce giant invested $200 million in a Future Group unit. Amazon's position has been backed by a Singapore arbitrator.

Without confirming or denying the takeover of its stores, Future Retail Ltd in a stock exchange filing said, "The shareholders are aware that FRL is going through an acute financial crisis. The company has defaulted on its loan servicing and as already informed, the account of the company has been classified as NPA by the banks."