Future Lifestyle Fashions (FLFL), promoted by Kishore Biyani and managing Central and Brand Factory stores, has received resolution proposals from two entities. Sources familiar with the matter shared that scrap dealer Space Mantra and fashion giant Donear Industries are involved.
Space Mantra, previously the lone applicant for Future Retail, saw its Rs. 550-crore offer rejected by lenders due to its perceived low valuation. Donear Industries, via its textile arm GBTL, had initially shown intent to acquire Future Enterprises, an affiliate of FLFL, yet eventually refrained from submitting a resolution plan.
Meanwhile, it was reported last week that Jindal (India), supported by the BC Jindal Group, emerged as the sole resolution applicant for Future Enterprises.
Acknowledging claims worth Rs 2,117 crore from financial creditors, the KPMG-backed resolution professional (RP) Ravi Sethia highlighted State Bank of India’s leading claim at Rs. 467 crore.
FLFL informed stock exchanges on 17th November about receiving two resolution plans, refraining from disclosing the applicants’ identities. However, sources suggest that neither offer seems appealing upon initial evaluation.
The debt resolution process faced setbacks in August after revelations that a forensic auditor appointed by lenders had prior associations with Biyani’s companies, sparking conflict-of-interest concerns. This led to a Bombay High Court ruling prohibiting the involvement of the auditor and his firm in FLFL’s forensic examination.
As detailed in its FY ’22 annual report, FLFL positioned itself as the flagship fashion company within the Future Group, managing 180 retail outlets across various formats. However, the company experienced business disruptions due to the nationwide lockdowns enforced in FY ’21 amid the COVID-19 pandemic.
During FY ’22, the company recorded a revenue of Rs. 2994 crore but faced losses exceeding Rs. 2500 crore, primarily due to hefty interest expenses and other costs. In the initial half of FY ’23, it posted sales amounting to Rs. 421 crore.