From Bank of India and Axis Bank to Franklin and Kotak Mutual Fund⁠— lenders' will vie for their pound of flesh from the Ambani-Biyani deal

• The known debt of Future Group’s listed companies is over ₹26,000 crore ($3.5 billion), including those from banks, mutual funds, suppliers et all.
• Bank of India has the highest exposure, to the tune of ₹5,750 crore, among all banks that have together lent about ₹12,000 crore to the Future Group's listed companies.
• Franklin Templeton and Kotak Credit Risk Fund have lent money to Future Group, about ₹968 crore.
• It is reported that lenders to the listed companies may get 60% of their dues back post the merger but they may want more.

There are many who will heave a sigh of relief after Reliance Industries’ decision to buy out Future Group companies. While the shareholders of Kishore Biyani’s companies are still figuring out what is the worth of their stake in the new deal, based on the swap ratio, the bankers know the approximate amount that they are likely to get back. And, they may want more as the discussions open up this week starting Aug 31.

The swap ratio: For every 10 shares of Future Enterprises, investors will get...
Source: Capitalmind


Mukesh Ambani has decided to pay about ₹25,000 crore and agreed to pay off the latter’s loans to the tune of ₹12,500 crore. However, the known debt of Future Group’s listed companies is over ₹26,000 crore ($3.5 billion), according to a CapitalMind report.


Banks like Axis Bank, Bank of India, Bank of Baroda and many others have lent about ₹12,000 crore to Biyani’s listed companies and just as much to unlisted firms owned by Biyani and his family.

Bank of India has the highest exposure, to the tune of ₹5,750 crore. But it seems the market already had a whiff of the deal as the stock has climbed about 10% in the last three years.


However, Ambani will not repay the debt of Biyani’s private companies. There are at least 13 promoter group companies under Future Enterprises (Biyani’s flagship firm), and their total debt stood close to ₹4,100 crore.

While Biyani and his family hold a 33.5% stake in Future Group’s listed companies, almost all of it has already been pledged to lenders.


Franklin Templeton and Kotak Credit Risk Fund have lent money to Future Group, about ₹968 crore. It is now widely reported that banks don’t expect to get all their dues back. Ambani who seems to have driven a hard bargain, reportedly wanted banks and suppliers that they would get only 60% of their dues back.

SEE ALSO:
Walmart CEO defends Flipkart's valuation, says learnings from India helped double their e-commerce sales
Masayoshi Son’s best bet for future profit is PayPay in Japan⁠ — built on Vijay Shekhar Sharma’s Paytm model in India
Facebook is hiring senior execs for its digital wallet Novi and its partnership with Jio