Future Retail in an exchange filing announced that the board of the company has approved a resolution plan to restructure the existing secured financial debt from the bankers of the company as permitted under the Reserve Bank of India’s (RBI) August 6, 2020 circular.
The company added that the resolution plan will now be submitted to Kamath Committee for approval. As part of the resolution plan, the debt raised through the non-convertible debentures (NCDs) issued by the company are also part of the existing debt and are proposed to be restructured. It has received the written consent of 100% of the holder(s) of the NCDs to amend the terms and conditions of the NCDs as per the resolution plan approved by the other lenders of the Existing Debt.
As for the reasons for restructuring of debt, the company said that the Covid-19 pandemic has deeply impacted the long-term business viability and led to significant financial stress across the industries. The debt burden has become disproportionate relative to the cash flow generated by the company owing to the multiple lockdowns since the pandemic surfaced, posing significant financial stability risks to the business. Hence, the restructuring of the debt is crucial and essential, it added.
Repayment of short term loans, term loans, NCDs, overdue working capital loans to be extended up to a maximum of 2 years, Future Retail said.