Future Retail Averts Default, Pays $14 Million Interest On Secured Notes
Future Retail had asked for a 30-day grace period on the interest payments last month.
Future Retail Ltd. averted default by making an interest payment of $14 million on its secured notes due in 2025 to investors.
The company had asked for a 30-day grace period on its interest payments last month on the same notes and cited the local lockdowns—imposed due to the coronavirus pandemic—that restricted its operations and liquidity position and resulted in the missed its interest payment due on its U.S. dollar notes on July 22.
The company had raised $500 million via dollar-denominated bonds in January for a five-year tenor at 5.60%, which were to be used for capital expenditure for acquiring certain in-store retail infrastructure assets of Future Enterprises.
Fitch Ratings had downgraded Future Retail, the retail arm of Kishore Biyani-led Future Group, after it failed to pay interest on bonds worth $500 million. The ratings agency downgraded Future Retail’s long-term issuer default rating to ‘C’ from ‘CCC+’. It also cut the rating on its $500-million bonds, with a yield of 5.6%, due in 2025 to ‘C’ from ‘CCC+’, according to a statement.
Future Retail’s liquidity position, according to Fitch, remains under severe pressure on account of the nationwide lockdown imposed to contain the coronavirus pandemic.