Future Retail in the red
Future Retail is down in the red today. The stock is currently down almost 4% at Rs.76 levels. Volumes remain muted at 1.50 lakh shares and its 52-week low is at Rs.63.30.
The stock is in the red on news that its plan to take-in Future Value, which owns Big Bazaar and Food Bazaar. Wef 1st July 2012 , already stuck in the red tape for over nine months now could get further delayed. SEBI has stated it needs to closer look at the merger plan and that definitely means more delay.
Future Retail has a debt of Rs.650 crore, which is in the form of Compulsory Convertible Debentures (CCD) and people in the know say that SEBI worried that this entire merger plan should be merely for benefitting the Future Value’s debenture holder who can link the conversion price of instruments to the market price and that could be at the cost of the minority shareholders of Future Retail. SEBI has also sought to find out whether the CCD holders were in any way associated with the promoters though at this juncture, identity of the debenture holders is not given. Also there is worry about how this move, to take in Future Value will in any way help the group reduce its debt.
The CCDs will be converted into equity shares at various dates, starting 30th Dec’14 and before 17th April’15.