Future Retail Creditors extend voting deadline Again, Weighing low id vs. Liquidation

20 September 2023, Mumbai

The Committee of Creditors (CoC) for Future Retail (FRL) has extended the voting deadline for determining the winning bidder to acquire the financially troubled company until September 30, 2023.

Nuances

The extension comes as creditors remain undecided on whether to accept a notably low offer from SpaceMantra or opt for the liquidation of FRL, given the insufficient time available to solicit fresh bids.

This decision was made after the second timeline, which concluded on September 15, 2023, revealed that a significant number of creditors, comprising a majority, are yet to reach a consensus on the proposed takeover plan.

The decision to extend the voting deadline is a sign of the uncertainty and complexity surrounding FRL's insolvency resolution process.

Challenges

The company is facing a mountain of debt and has been struggling to stay afloat. SpaceMantra is the only bidder to acquire FRL, but its offer is significantly lower than what creditors are owed. Creditors are now faced with the difficult choice of accepting a low offer or liquidating the company, which would result in job losses and a loss of value for all stakeholders.

The extension of the voting deadline gives creditors more time to deliberate on their options and reach a decision that is in the best interests of all stakeholders.

However, it also prolongs the uncertainty and instability surrounding FRL, which could have a negative impact on the company's operations and employees.

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