Future-Reliance deal: Supreme Court halts NCLT approval

The Supreme Court on Monday prevented the National Company Law Tribunal (NCLT) from taking a final call on the Rs 24,713-crore deal between Kishore Biyani-led Future Retail (FRL) and Reliance Retail, even as it allowed the tribunal to go ahead with the proceedings for merger of Future group and Mukesh Ambani’s Reliance group firms.

The apex court’s decision to overturn the Delhi High Court’s February 8 ruling that lifted a freeze on the deal and allowed the NCLT to grant its approval for it based on merits is a positive for American e-commerce giant Amazon, which is keen to scuttle the deal. Amazon had secured an interim stay on the deal from a Singapore arbitration tribunal in October, over alleged violation of a partnership contract by Future Group when it agreed to sell the assets to Reliance.

The fruition of the deal is critical to Future Group’s efforts to repay its large debt and ward off insolvency. FRL’s stock fell as much as 10% and its dollar bond maturing in 2025 dropped 3.8 cents on the dollar after the court order on Monday, Bloomberg reported. Reliance Industries also slipped as much as 2.8%.