It looks like Heritage Foods, promoted by the family members of Telugu Desam Party president and former Andhra Pradesh chief minister N Chandrababu Naidu has plunged into deep debt crisis.
It was evident from the way the company sold its entire holding representing over three per cent stake in Future Retail for around Rs 132 crore in the open market to mainly repay its long-term loans.
“The company has disposed of its entire holdings/investment of 1,78,47,420 equity shares held in Future Retail. These shares were sold through stock exchange in open market in various tranches and the net amount of Rs 131.94 crore was received by the company," Heritage Foods said in a regulatory filing.
The company said sale proceeds shall be mainly utilised for the repayment of term loans of the company.
In November 2016, Future Group acquired the retail business of Hyderabad-based Heritage group in an all stock deal.
As a part of the deal Heritage Foods got 3.65 per cent share-holding in Future Retail through fresh issuance of shares, whose value at that time was Rs 295 crore.
Now, it appears the value of the shares has crashed to Rs 132 crore and since Heritage Foods is facing a heavy debt burden, it has decided to dispose of its shares even for a loss to repay its pending loans.
In fact, even Future Group is also suffering heavy losses.
In October this year, Future Group founder Kishore Biyani said his company had lost nearly Rs 7,000 crore revenue in first three-four months of Covid-19 pandemic due to closing of stores, which led him to sell his business to Reliance Industries led by Mukesh Ambani for Rs 24,713 crore.