Bank of India files insolvency plea against Future Lifestyle for due recovery

Adding more trouble to the debt-ridden Future Group, public sector lender Bank of India on Tuesday filed a petition before the National Company Law Tribunal (NCLT) for initiating insolvency proceedings against Future Lifestyle Fashions. Future Lifestyle Fashions is the apparel arm of Future Group.

Future Lifestyle, in response, said that it is currently in the process of taking legal advice in the said matter.

Apart from this, the company is already facing two other insolvency petitions; one by its financial creditor Catalyst Trusteeship Ltd, claiming default of an amount of Rs 451.98 crore and second petition by an operational creditor Lotus Lifespaces LLP, claiming default of Rs 150.37 crore.

Future Lifestyle has in-house retail chains Central and Brand Factory, exclusive brand outlets (EBOs) and other multi-brand outlets (MBOs) of apparel labels including - Lee Cooper, Champion, aLL, Indigo Nation, Giovani, John Miller, Scullers, Converse and Urbana.

The company's lay tribunal has already initiated CIRP (corporate insolvency resolution process) against the Kishore Biyani-led Future Group's flagship firm Future Retail after admitting the plea by the Bank of India.

Future Lifestyle's board has already initiated the "monetisation of identified assets", subject to requisite approvals from lenders.

Last week, Future Lifestyle -- while declaring its results for the April-June quarter -- had informed that under the One Time Restructuring (OTR) Plan with the lenders, it has debt servicing obligations aggregating to Rs 422.11 crore within the next 12 months.

This comprises repayment of the principal amount of long-term debts of Rs 277.04 crore and short-term borrowings of Rs 145.07 crore.

Future Lifestyle had further said that its "current liabilities exceeded its current assets (including assets held for sale) by Rs 1,180.66 crore as at March 31, 2022."

Also, it has already defaulted on repayment of Rs 335.08 crore of principal amount on loans from banks as on June 30, 2022.

"The lead bank and State Bank of India have classified the accounts of the company in the system as Non-Performing Assets (NPAs) on May 31, 2022, followed by other banks during the month of June 2022," it said.

Future Lifestyle was part of the 19 group companies operating in retail, wholesale, logistics and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a Rs 24,713 crore deal announced in August 2020.

The deal was called off by the billionaire Mukesh Ambani-led Reliance Industries in April, after it failed to get lenders' support of the respective companies.

Following this, the group ran into deep financial trouble.

Future Enterprises is also facing two petitions by its creditors to initiate insolvency proceedings against the company.

(With inputs from PTI)