Future Retail is in talks with a consortium of investors led by Premji Invest to sell a stake in the retail chain, even as it is continuing parallel discussions with Reliance Retail, Amazon and Samara Capital for a deal, said two people privy to the matter. This is as per a report in the Economic Times.
Founder Kishore Biyani is looking to either sell a significant or his entire stake in his flagship retail firm that is facing a liquidity crisis with mounting debt.
Premji Invest already owns an about 6% stake in Future Retail, while Amazon has about 3.2%. “Premji Invest is looking to increase its stake,” said one of the people. It is also trying to bring in other investors on board and collectively raise funds, he said.
While these investors including Samara have already signed term-sheets to buy a non-controlling stake in Future Retail, talks with Reliance Retail includes offering a majority stake in Future Lifestyle Fashion, which runs the Central department chain, said the second person, adding: “A Reliance deal will mean Biyani has to lose control at the group level.”
“As a policy, we do not comment on media speculation and rumours,” said a Reliance Industries spokesperson, adding: “Our company evaluates various opportunities on an ongoing basis.”
Big Bazaar hypermarkets contribute about 80% to Future Retail’s revenue. Many of its stores had to shut or significantly limit operations after the government imposed the nationwide lockdown in late March to contain Covid-19. While this has worsened the situation, the financial stress on the company and the Future Group had begun before the pandemic.
