Lenders of troubled retail chain Future Retail Ltd will meet on Saturday to consider next steps, including legal options, after the company sought ten-day time to work out a settlement for payment of dues.
While senior bank executives have been reviewing the case on regular basis, Saturday’s meeting assumes significance as matter was heard in the Supreme Court on Thursday, banking sources said.
Bank of India executives, at a post-results’ media interaction, said the account has already been treated as non-performing asset. The bank has proactively made 47 per cent provisioning, which is higher than requirement of 40 per cent. Its exposure is about Rs 1,047 crore.
BoI executives explained the options available before lenders include invoking provisions of SARFESAI or Bankruptcy act. There is also a choice available of invoking personal guarantees given for loans, Bank of India executives said.
Lenders would consider proposal when the company comes with clear plan for repayment and not proceed with legal recourse till clarity emerges on proceedings in Supreme Court.
On Thursday, the consortium of 27 banks told the Supreme Court the money lent to Future Retail belonged to the depositors. And that to safeguard the “public interest”, the entire assets of FRL can be subjected to open bids by Amazon and Reliance with a reserve price of Rs 17,000 crore, the lenders said.
A Bench headed by Chief Justice N V Ramana is hearing FRL’s plea seeking a direction to the banks that no coercive action be taken against it for a certain time period due to non-payment of debt. The court did not pass any interim order and adjourned the hearing at the request of the company.