Future Enterprises defaults on NCDs!

Future Enterprises defaults on NCDs!

Last updated: 22 Dec, 2020 | 07:27 am

Future Enterprises defaults on NCDs!

Recommended action: Exit your holdings in the stock.

Future Enterprises defaults again

  • Future Enterprises has defaulted on interest payments worth ₹13.91 crore on NCDs. In the last few months, the company has defaulted on several debt obligations.
  • Last week the company said that its liquidity position had been affected for reasons beyond the company’s control and despite sincere efforts, it is facing extreme difficulty in generating the cash required to service external debt obligations
  • As shown in the table above, Future Enterprises has reported a loss of ₹320 crore in Q2FY21, due to a drop in revenue from operations.

Setback for Future Group entities

  • In a setback for Future Group entities, the Delhi High Court has declined plea for an interim or injunction restraining Amazon from writing to regulatory authorities SEBI and CCI regarding the ₹24,713 crore deal with Reliance Industries. (View details)
  • This could come as a major setback for Future entities, as Future Enterprises has proposed to utilise the consideration to be received from the pending ₹24,713 crore deal with Reliance Industries for pre-payment of the Non-Convertible Debentures (NCDs). 

According to estimates by a few lawyers (reported in the media), the deal could take about 6-9 more months to materialise after all the regulatory approvals. Hence, the company could remain under pressure in the near-medium term.