New Delhi: Future Retail is scaling down its operations which will help reduce losses in the coming months.
The company is proposing to expand its online and home delivery business to increase its reach to the customers.
Future Retail said in a regulatory filing that it has been finding it difficult to finance the working capital needs. Increasing losses at store level is a grave concern and is a vicious cycle where larger operations are leading to higher losses.
The company has incurred a loss of Rs 4,445 crore in the last four quarters.
“Termination notices have been received for significant number of stores due to huge outstanding, and we would no longer have access to such store premises,” the company said.
“The shareholders are aware that FRL is going through an acute financial crisis. The company has defaulted on its loan servicing and as already informed, the account of the company has been classified as NPA by the banks.
“The ongoing litigation initiated by Amazon in October 2020, and which is continuing for the last one-and-a-half years, has created serious impediments in the implementation of the scheme, resulting in severe adverse impact on the working of the company,” it said.
In respect of the Scheme of Arrangement between the company, other Future Group companies and Reliance entities, the NCLT, Mumbai Bench, has reserved its orders.
In view of this, the long-stop date for the scheme has already been extended by six months to September 30, 2022 by Reliance.
The company is hopeful that the Scheme of Arrangement proposed with Reliance will be implemented, which will be beneficial for all the stakeholders, it said.