Premji Invest pumps in Rs 175 cr in Future Group

Premji Invest, the private investment entity of the Wipro Chairman Azim Premji has invested Rs 175 crores into a promoter company of the Future Group in a structured deal. The debt-ridden company has been trying to kick-back to life initiating several measures. The latest development comes as a breather for the Future Group that requires funds to subscribe to the Rs 1,600 crores rights issue.

Future Retail's rights issue will open on January 15 and close on January 29. The Future Group's promoter company has issued zero coupon redeemable preference shares to Premji Invest with a maturity of three years. After the tenure, the promoters have to repay the amount along with an interest. In May, Premji Invest had bought 8 per cent stake in a group company Future Lifestyle Fashions for Rs 125 crores. But, the sale involved equity capital infusion.

The Future Group promoters are also in talks to sell their balance 18 percent stake in Pantaloon Fashion Retail. The rights issue's success is crucial to the group's plans to reduce the debt burden of Future Retail. The company's total debt, as on September 30, is about Rs 6,600 crores, according to JP Morgan.

Over a year ago, Future Retail tried to simplify its business structure by creating three different entities—Future Retail which houses its value retail (hypermarkets and supermarkets), Future Lifestyle Fashions for fashion and lifestyle retail, and Future Ventures India for the consumer products businesses.