Kishore Biyani-promoted Future Lifestyle Fashions (FLFL) that ran the Central and Brand Factory stores has received two resolution offers, one each from scrap dealer Space Mantra and fashion retailer Donear Industries, people aware of the development told ET.
Lenders had rejected Space Mantra’s Rs 550-crore offer for Future Retail because it was too low. Space Mantra was the sole resolution applicant for Biyani’s flagship company Future Retail.
Donear Industries-owned textile maker GBTL had shown interest in acquiring Future Enterprises – an affiliate of FLFL- but eventually it did not submit a resolution plan. BC Jindal Group-promoted Jindal (India) was the sole resolution applicant for Future Enterprises, ET reported last week.
KPMG-backed resolution professional (RP) Ravi Sethia did not respond to ET’s request for comments.
The RP has admitted Rs 2,117 crore in claims from financial creditors, of which the highest claim is from State Bank of India – at Rs 467 crore.
The company told stock exchanges on November 17 that it had received two resolution plans without naming the applicants.
“Although the RP has yet not discussed in detail both the plans, neither of the two offers is attractive,” one of the persons cited above said.
Debt resolution of FLFL suffered a setback in August when it emerged that the forensic auditor appointed by the lenders had undertaken assignments for the promoter Kishore Biyani. Dilip Dixit, a partner of GD Apte & Co, had undertaken an assignment for a Biyani-promoted company before FLFL was admitted for corporate insolvency. He did not disclose this to lenders while undertaking the forensic assignment in July 2022, but a year later, he filed a petition with the Bombay High Court that he was conflicted.
A Bombay High Court division bench on August 11 ruled that neither Dilip Dixit nor GD Apte & Co should undertake the forensic auditor’s role for FLFL due to conflict of interest, ET reported on August 22.
FLFL described itself as the flagship fashion company of Future Group in its FY22 annual report. It operated 180 retail stores across formats that included Central, Brand Factory, and exclusive brand outlets. However, its business was hit due to a nationwide shutdown in FY21 to prevent the spread of Covid 19.