An Indian court has blocked Future Enterprises from selling its stake in its general insurance joint venture business with Italy’s Generali, following a legal challenge by a group representing bondholders, two sources familiar with the matter told Reuters.
The court’s order is another setback for Future, which is facing a mountain of debt and is in dire need of funds after being hit hard by the coronavirus pandemic. It is struggling to sell its retail assets due to an ongoing legal dispute with estranged local partner Amazon.com Inc.
Future Enterprises said in January that it had decided to sell its 25% stake in Future Generali India Insurance Company to Generali for 12.52 billion rupees ($165.87 million).
IDBI Trusteeship went to court representing foreign bondholders who subscribed to Future Enterprises companies that had defaulted. The bondholders had rights mandating Future Enterprises not to dilute its Future Generali stake, one of the sources said.
After hearing IDBI, a Mumbai city civil court ordered Future Enterprises to hold off from selling the stake until the next hearing on March 10.
A court order dated Feb. 25 showed that IDBI had shared its concerns with Future before filing the lawsuit, but received no response. The judge in Mumbai agreed with IDBI’s plea to stop the transaction, saying it was imposing a “restrain” on Future, the order showed.
Spokespersons for Future Enterprises, Future Generali Insurance, Generali and IDBI Trusteeship did not immediately respond to requests for comment.
Future had plans to use proceeds from the sale of its insurance stakes to sustain its retail business and clear liabilities of other group companies.
(Reporting by Aditya Kalra in New Delhi; editing by John Stonestreet and Ed Osmond)
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