Future Retail had informed the bourses on Wednesday that the company has missed the service of the payment of interest due on the USO notes (listed on Singapore Stock Exchange) on July 22, 2020.
The company said that it has raised an amount worth USD 500 million in January, on which, the company could not make the interest payment of around Rs 100 crore.
Future Retail has mentioned that the liquidity position got affected due to the spread of COVID-19 pandemic and consequently, restricted business operations, which caused this non-payment of interest.
On the liquidity front, the company’s working capital cycle has also been affected by rising inventory days from 79 in FY17 to 85 in FY18 and 91 in FY19. The company’s liquidity has been harshly affected due to lockdown measures. It has applied to the lenders for a moratorium as per the RBI package as well as to the bankers for enhancement in working capital limits.
Talking about the debt level, the company added that it has a debt of Rs 3,841 crore as of September 2020 as against Rs 2,657 crore in March 2020.
Currently, the promoter holding in the company stood at 41.73 per cent. Out of which, 74.90 per cent are pledged. Further, foreign institutional investors (FIIs) have also decreased their stake to 11 per cent in June 2020 from 17.6 per cent in June 2018. Domestic institutional investors (DIIs) have also declined their stake to 3.6 per cent in June 2020 from 4.6 per cent in June 2018.
Future Retail promoted by Kishore Biyani operates in the various divisions through its brands like Big Bazaar, a hypermarket format; Food Bazaar, a supermarket; fbb, a fashion destination; Foodhall, a supermarket, and easyday convenient stores. In terms of home business, the company functions Home Town, a one-stop destination for home improvement, and EZone, a consumer durable and electronics chain.
Today, the stock of Future Retail declined nearly five per cent and made an intraday low of Rs 100.60 on BSE.