Kishore Biyani-led Future Retail narrowly averted a default by repaying its investors hours ahead of the 30-days grace period deadline ending, people aware of the matter told CNBC-TV18.

Future Retail paid $14 million or about Rs 105 crores in interest dues to its coupon holders on Monday for $500 million senior secured notes, said a person directly aware of the matter.

However, Future Retail in a regulatory filing confirmed the CNBC-TV18 newsbreak.

“In furtherance to our letter dated 22nd July, 2020, wherein we had informed about the grace period of 30 days for making payment of interest on above USD Notes. Today, we are pleased to inform that the Company has made the payment of said interest for the half year ended for an amount of $14 million on above USD Notes. We thank you all the investors and USD Notes holders for their continued confidence in us,” the company said.

The company was originally due to make the interest payment on its 5.60 percent 2025 dollar notes on July 22 which it missed.

“Due to the nation-wide lockdown imposed to restrict the spread of COVID-19 pandemic, and consequent restricted business operations of the Company the liquidity position has been affected causing us to miss the service of the payment of interest due on the USD Notes (listed on Singapore Stock Exchange) on 22nd July, 2020. The terms of issuance of the USD Notes provide for an additional period of 30 days for payment of interest from the due date, in case the same could not have been paid on the original due date,” its notice in July read.

The retail giant has found itself in troubled waters since the nationwide lockdown hurt its businesses, worsening its already strained financial position. Future Group had a consolidated debt of Rs 12,778 crore as of September 2019, as per the company’s public records. Its flagship company Future Retail had a gross debt of Rs 2,657 crore and net debt of Rs 6,456 crore as of March 2019.

“Whatever each bank in the consortium could do individually, we have all done,” said a senior executive from a bank with large exposure to Future Group. “They (Future Group) have taken whatever loans were available under the COVID19 Emergency Credit Line from a few public sector banks,” the person added.

Another senior executive from a bank with exposure to Future Group said that the company is eligible under RBI’s August 6 Resolution Framework for COVID19-Related Stress. Under this, its loans can be restructured and the repayment schedule extended by upto two years.

“Restructuring option is on the table, they are eligible as per RBI circular. Let us see if they are able to monetize their assets and make do, else this is another option,” this person said on the condition of anonymity.

First Published:Aug 24, 2020 4:26 PM IST