A closure to the Future Group’s sale of retail assets has got delayed further, with major lenders to the company rejecting Reliance Retail’s proposed takeover scheme.

Given how Reliance Retail has taken over close to 900 stores of Future Retail (FRL), banks were hoping for some assurance from the former on the repayment of the dues of `6,287 crore. However, Reliance Retail is understood to have scaled down the value of the assets to lower than the original sale price of Rs 24,713 crore, disappointing bankers who voted against the scheme. The details of Reliance Retail’s scheme and the exact reason for banks’ reservations against it could not be immediately ascertained.

While Bank of India ( BoI), the leader of the consortium, initiated insolvency proceedings against Future Retail late last week, it would appear that lenders will need to take a steep haircut. Bankers have been unhappy with the corporate insolvency resolution process (CIRP) but decided nonetheless to pursue it. Earlier, CSB Bank had approached the debt recovery tribunal (DRT) to recover its dues from Future Retail.

Corporate experts observed that lenders should have accepted Reliance’s offer, even if it did not meet their expectations, because a delay would only lead to a further erosion in the value of the assets.

State Bank of India (SBI), Union Bank of India, Bank of Baroda (BoB) and IDBI Bank are among the other members of the consortium. Future Retail’s loans had been restructured under the resolution framework for Covid-related stress proposed by the Kamath committee on October 29, 2020. Throughout the 19-month period when the company’s loans remained under moratorium, bankers had been hopeful that Reliance Retail would take over the Future Group’s wholesale, retail and logistics businesses for `24,713 crore under a deal thrashed out in August 2020 and clear its dues to banks. The implementation of the scheme came under a cloud when Amazon objected to the deal and triggered a legal battle that is still ongoing.

Future Retail defaulted on dues worth Rs 3,494.56 crore in December 2021 and on another Rs 5,322 crore scheduled for March 31, 2022.

The company has already slipped in January and the 40% provisions taken against that account will show in banks’ Q4FY22 financial results. Banks have also started to step up provisioning against their exposure to Future Enterprises after the company defaulted on repayments worth Rs 2,836 crore in March. Bankers FE spoke to said that the company is unlikely to be able to cure the default over a one-month period and the account slipping into the non-performing asset (NPA) category would entail 40% provisioning by the end of the current month.