Debt-ridden Future Retail on Wednesday said its board has approved raising up to Rs 650 crore by issuing non-convertible debentures (NCDs) to pare debt.
The NCDs will be issued on private placement basis in one or more tranches, Future Retail said in a BSE filing.
The Board has also authorised the Committee of Directors to decide on matters and transactions relating to aforesaid proposed issuance and allotment of NCDs, including but not limited to finalisation and approval of terms and conditions of issue, number of NCDs and timing of the issue from time to time, the filing said.
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The funds will be used mainly for replacing the company's existing high cost current or near term maturity debts requirements.
The move comes after Future Retail's promoter Kishore Biyani defaulted on loans in March and its share price took a plunge.
Several rating agencies as Standard & Poor's and Fitch have downgraded the credit ratings of Future Retail after the default.
Future Retail operates over 1,500 stores that cover over 16 million square feet of retail space in 400 cities. It has large format stores, Big Bazaar, its flagship chain, besides small store neighbourhood retail chains, EasyDay Club and Heritage Fresh.
However Kishore Biyani-led Future Group has started talks with Amazon for selling stake in Future Retail Ltd to the US-based ecommerce major, industry sources said.
The two parties initiated talks earlier this week for a stake in Future Retail, they said.
In August last year, Future Retail had informed stock exchanges that Amazon.Com NV Investment Holdings LLC would acquire 49 percent stake in Future Coupons Ltd from their promoters, led by Kishore Biyani, for an undisclosed amount. At the time, Future Coupons held 7.3 percent stake in Future Retail.
As part of the agreement, Amazon was also granted a call option, which allowed the US ecommerce major an option to acquire all or part of the promoter's shareholding between the third and tenth year. Amazon also has a stake in other retail chains in the country, Shoppers Stop and More.
(Disclaimer: Additional background information has been added to this PTI copy for context)
(Edited by Saheli Sen Gupta)
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