NCLT Grants 90 Days Extension To Future Retail For Concluding Insolvency

"Hon’ble National Company Law Tribunal ("NCLT"), Mumbai, by Resolution Professional of Future Retail Limited (“FRL") for exclusion of a period of 90 days’ from CIRP of FRL, and consequent extension from April 16, 2023 to July 15, 2023, for concluding the CIRP of FRL," said Future Retail in its regulatory filing.

The order was pronounced by the NCLT on 13 April, 2023, heard the application and granted the said exclusion of 90 days from CIRP of FRL and consequent extension for completion of CIRP till July 15, 2023. 

The insolvency proceeding was initiated against FRL by NCLT on July 20, 2022, following loan default.

The Insolvency and Bankruptcy Code (IBC) time frame for resolution is 330 days, inclusive of the time taken for litigation.

As per Section 12(1) of the Code, the CIRP shall be completed within a period of 180 days from the date of initiation. However, NCLT may grant a one-time extension of 90 days. The maximum time within which CIRP must be mandatorily completed, including any extension or litigation period, is 330 days.

Last week, Future Reatil Ltd informed that they have received an Expression of Interest (EoI) from 49 players, including Reliance Retail, Jindal Power Ltd and Adani Group for acquiring the assets of the company.

On March 23, 2023, the resolution professional (RP) of FRL invited new expressions of interest, where prospective buyers can bid for the debt-ridden firm "as a going concern or individual cluster or a combination of clusters of its assets", as it failed to attract a resolution plan in over four months.

Earlier, it had received EoI and finalised 11 prospective bidders, including Reliance and April Moon Retail, but could not get a resolution plan despite two extensions in the deadline for submissions.

The Committee of Creditors had provided two options in the EoI, for which the last date for submission was April 7, 2023.

In the first option, the Prospective Resolution Applicant (PRA) could bid for the acquisition of Future Retail as a whole, including its shareholding interest in its subsidiaries. While under the second option, Future Retail's business has been distributed in five clusters diving business, in which PRAs can bid for "any individual cluster or any combination of clusters."

As per the invitation, FRL currently has access to 302 leased retail stores spread across 23 states and Union Territories, consisting of 30 large format stores such as Big Bazaar and FBB stores and 272 small format stores.