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Reliance Retail Ventures (RRVL), which is India's largest retail company, along with six other companies, has expressed their interest in acquiring Future Supply Chain (FSC), the logistics and warehousing management arm of Future Group, which is currently facing bankruptcy.
In addition to RRVL, One City Infrastructure, Globe Ecologistics, Shanti GD Ispat & Power, Camions Logistics Solutions, Tatkal Loan India, and Sugna Metals have also submitted their expressions of interest for FSC. Once their expressions of interest are approved by a resolution professional and lenders, these companies will be requested to make financial offers for the acquisition.
FSC has played a crucial role in managing Future Group's warehousing and logistics requirements. Its inventory management tools have allowed the group entities, including Future Retail (FRL) and Future Lifestyle, to monitor and control inventory levels. Future Group entities have warehouses located in different zones, which supply the regional warehouse that, in turn, services stores across various locations. However, following Future Group's bankruptcy, the importance of FSC's operations has come into question.
It is worth noting that RRVL had previously made an offer to acquire the entire Future Group business for 324,713 crore in August 2020. However, the transaction fell through due to litigation initiated by American retail giant Amazon. Subsequently, lenders took Future Group companies to bankruptcy court. RRVL had also expressed interest in acquiring FRL, the flagship company of the group, but later decided against making any offer.
A spokesperson for Reliance declined to provide further details regarding their current interest in FSC. However, it is evident that the company's involvement in the bidding process signifies its continued focus on expanding its presence in the retail and logistics sectors.
In December 2019, Nippon Express (South Asia & Oceania), a subsidiary of Japan's Nippon Express, acquired a 22 percent stake in FSC through a combination of primary and secondary issuance. The partnership between Nippon Express and FSC aimed to leverage their complementary skills and services to gain a stronger foothold in the Indian logistics sector, which is large and rapidly growing. This investment provided opportunities for both companies to explore and expand their logistics capabilities across various sectors in the Indian market.
As the bidding process progresses and potential acquirers submit their financial offers, the future of Future Supply Chain and its role within the logistics landscape will become clearer. The outcome of these proceedings will not only impact the fate of FSC but will also have broader implications for the Future Group and the retail industry in India.
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