Biyani eyes a lifeline from Blackstone to offload debt

Kishore Biyani’s Future Group has approached private equity (PE) firms, including its existing investor Blackstone, as it tries to reduce debt and keep control of group companies, two people aware of the development said.

Last year, Blackstone invested around Rs 1,750 crore in Future Group. As part of the deal, the US PE firm acquired close to 6% stake in Future Lifestyle Fashion Ltd (FLFL), the group’s apparel business, and lent the rest to the parent company.

“They are in talks with multiple investors including Blackstone, which is an existing investor. Blackstone might infuse further capital in the group to help FLFL, which is facing challenges on the working capital front as its business has been hit hard by the nationwide lockdown,” said the first of the two people cited above, both of whom spoke under the condition of anonymity.

“The information given by you is purely speculative in nature and we officially deny any such development,” a Future Group spokesperson said. A spokesperson for Blackstone declined to comment.

The talks with PE investors are among various efforts at the group to monetise assets and deleverage the balance sheet.

On Thursday, CNBC TV18 reported that Future Group has put up its logistics business —Future Supply Chain Solutions Ltd—for sale, while Bloomberg reported that Amazon is looking to buy an up to 49% stake in Future Retail, the business that runs BigBazaar chain. The group is also seeking buyers for its stake in an insurance joint venture.

Biyani’s debt-related troubles surfaced in March when shares of his listed companies crashed, triggering a rating downgrade of the promoter holding company and invocation of pledged shares by lenders. The group has moved to find buyers for promoter shares in two group entities.

On May 4, rating agency Icra said it downgraded Future Corporate Resources, a promoter group entity, to D, after it defaulted on coupon payments. “The company has informed that it has sought a moratorium in payments for the same from the investors; however, the same has not been approved yet,” Icra said.

“Despite monetisation of investments across various group entities, the total group debt has increased as on December 31, 2019, as against March 31, 2019...total debt at group’s listed firms rose to Rs 12,778 crore as on 30 September 2019 from Rs 10,951 crore as on March 31, 2019,” Icra added.