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Reliance Industries-Future Group deal saves lenders from a $2.2 billion debt hole

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Future group

Future Group lenders have been saved from a $2.2 billion hit on their exposure to the conglomerate after the company announced its sale of all its businesses to Reliance Industries (RIL) for 24,713 crore on Saturday. Post the deal Mukesh Ambani’s Reliance Retail Ventures (RRVL) will hold 13.14% stake in Kishore Biyani’s Future Enterprises Ltd and will take over debt of 12,500 crore.

Lenders led by Axis Bank have a total exposure of 16,000 crore to the conglomerate. Analysts believe that there is most likely no haircut to lenders who have lent for business operations. According to data collated by ICICI Securities, Bank of India led consortium holds an exposure of 5750 crore, Axis Bank holds 1250 crore and Bank of Baroda holds 750 crore.

However, promoter level debt worth 11,900 crore will remain with the promoters, said a person close to Future Group who spoke on conditions of anonymity. Analysts believe that lenders may have to take a hit on this debt, post the discussion with the lenders next week.

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