Amazon Open To Bailing Out Future Group

Amazon Inc is reportedly willing to help its debt-laden partner Future Group in bringing in a strong, stable investor if the latter calls off its Rs 24,700 crore deal with Reliance Retail Ventures Ltd (RRVL).

Amazon which holds 49% stake in Future Coupons, the holding company of the then Kishore Biyani-owned Future Group, helped the latter by bringing in new strategic partners and investors to deal with its ballooning debt crisis.

According to a Mint report, Amazon is willing to help Future Group despite dragging it to the court for alleged violation of a non-compete pact in Future Coupons deal for bringing in RRVL.

The arbitration ruling is expected on or before October 26th. The arbitration ruling will be crucial as it would also decide the fate of Reliance Retail buying out Future Retail.

Amazon’s wish to help Future Group in bringing a strategic investor is borne out of fears that a potential deal Future Group and RRVL will significantly increase the competition for Amazon in India.

Through the deal signed in August with Reliance Retail Ventures Ltd, the Ambani led firm will acquire Future Retail that owns the BigBazaar retail stores which sell everything from groceries to cosmetics and apparel and Future Lifestyle Fashions Ltd that operates fashion discount chain Brand Factory. While Reliance will take over Future Consumer, which sells food, home, and personal care products, Future Group's financial and insurance business is not part of the deal.

It is to be noted that in 2019, Amazon had acquired a 49 per cent stake in Future Coupons for about Rs 1,430 crore, which owns a 7.3 per cent stake in Future Retail. The American online retailer has already approached the Singapore International Arbitration Centre. Amazon said despite being owning a stake in Future Coupons, it was not given the Right of First Refusal (RoFR) in the RRVL-Future Group deal.

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