Customers outside a Big Bazaar outlet in Gurgaon, near New Delhi, on January 13, 2019. Photo: AFP / Nasir Kachroo / NurPhoto

Amazon said it was willing to help Future Retail by injecting 70 billion rupees (US$940 million) after the cash-trapped Indian retailer called for help.

The independent directors of Future Retail asked the US e-commerce giant to confirm by January 22 if it could infuse 35 billion rupees to help the troubled retailer repay its lenders by January 29, and avoid being declared a non-performing asset.

On January 19, Amazon wrote to the independent directors of the Indian retailer, reiterating its willingness to help address their financial concerns.

Earlier this month, the country’s second-largest retailer missed the due date for the payment of 34.94 billion rupees to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon.

In the latest letter, Amazon wrote to Future Retail independent directors Gagan Singh, Ravindra Dhariwal and Jacob Mathew, saying it was willing to help the Indian firm through private equity firm Samara Capital, which has the backing of the e-commerce giant.

It said Samara Capital “remains interested and committed” to investing 70 billion rupees to buy all the retail assets of Future Retail and asked the Indian firm to furnish existing due diligence reports to Samara.

According to media reports, Amazon, in its letter dated January 22, stated: “Samara Capital has once again reiterated to us that they remain interested and committed to lead and take forward the term sheet dated June 30, 2020.”

The term sheet contemplates a purchase consideration of 70 billion rupees and provides for the “acquisition of all retail assets” of Future Retail, including the “small store formats” comprising the Easy Day, Adhaar and Heritage brands, through an Indian-owned and controlled entity structure led by Samara and supported by Amazon,” the e-commerce major stated in its letter.

However, Amazon has clarified in the letter that its engagement will not affect the binding nature of the injunctions passed in the Arbitration Proceedings and by Indian Courts. It added that the new transaction will have the understanding that “the transaction with the Mukesh Dhirubhai Ambani (Reliance Industries Limited) group will not proceed and not be acted upon, and all assistance would be done through legally compliant structures.”

Future and Amazon have been locked in a bitter legal tussle after Reliance Industries in August 2020 agreed to buy the retail, wholesale and logistics arms of Future Group for 275 billion rupees ($3.6 billion).

The US e-commerce giant took Future Group to arbitration at the Singapore International Arbitration Centre in October 2020, arguing it had violated their contract by entering into a deal for the sale of its assets to Reliance Retail.

Amazon alleged that the proposed Reliance deal violated the earlier 2019 agreement when the e-commerce giant acquired a stake in Future Retail’s promoter Future Coupons. This agreement provided Amazon with the first right of refusal during a stake sale. There was also a non-compete clause that prevented Future Group from approaching Amazon’s competitors.

In December, India’s fair trade regulator, the Competition Commission of India, suspended the 2019 approval for Amazon’s deal to acquire a 49% stake in Future Coupons, citing irregularities, and slapped a penalty of more than 2 billion rupees on the e-commerce major.

Amazon later challenged this order before the National Company Law Appellate Tribunal, which has slated the next hearing for February 2.