Indian retail company makes deposit payment
India’s Future Retail Limited successfully made a foreign bond payment before the end of the grace period today. The flagship company
India’s Future Retail Limited successfully made a foreign bond payment before the end of the grace period today.
The flagship company of one of India’s largest retailers, Future Group, informed India’s National and Bombay Stock Exchanges on February 18 that it had made a payment of $14 million on its foreign currency denominated bonds . This followed their initial repayment default due last month.
Credit rating agency Standard & Poor’s rated the bonds in Selective Default (SD), after the company defaulted on loan payments. They have always made bond payments within the 30-day grace period, which is part of the terms of a restructuring agreement signed in April 2021. Future Retail is also awaiting a legal battle with Amazon. The latter alleged he breached a shareholder agreement over the proposed sale of assets to Reliance Retail to consolidate their operations, threatening competition.
Expect Future Retail to win its legal battle against Amazon due to lax regulations regarding private mergers in India. Such a win will likely restore investor confidence in Future Retail. This could convince domestic lenders to continue to allow Future Retail to make interest payments on its bonds, even if it remains heavily indebted.