After news reports that Future Retail had entered into a share subscription agreement with Amazon, the company's shares plunged more than 5 percent after the company announced the sale of 49 percent stake in promoter entity Future Coupons to e-commerce giant Amazon. The stock dropped by 5.67 percent to Rs 390 on BSE in the late morning session.
On the NSE, the stock tumbled 5.61 percent to Rs 390.50. The counter witnessed heavy volume as more than 27 lakh shares of the company were traded on NSE. The trading volume spurted more than eight-folds on BSE to around 1.65 lakh.
Future Retail in a late filing to bourses on Thursday announced that Amazon will make an equity investment in a promoter group firm Future Coupons for a 49 percent stake.
Kishore Biyani on behalf of the existing shareholders is forming part of the promoter group and Future Coupons Limited (promoters) have entered into a share subscription agreement and a shareholders' agreement with Amazon.Com NV Investment Holdings LLC, the filing said.
"Amazon has agreed to make an equity investment in Future Coupons Limited for acquiring a 49 percent stake comprising both, voting and non-voting shares, " the Kishore-Biyani led Future Retail said in the filing.
#OnCNBCTV18 | @amazon to acquire 49% in Future Retail's promoter entity Future Coupons. @_prashantnair @PriyaSheth7 in conversation with Arvind Singhal, Chairman, Technopak@fg_buzz #FutureRetail #Amazon #DoneDeal pic.twitter.com/RcJBZ7dHGg
— CNBC-TV18 News (@CNBCTV18News) August 23, 2019
As part of the deal, Amazon has been granted a call option, which allows Amazon to acquire all or part of the promoters' shareholding in Future Retail Limited and is exercisable between the third to 10th years, in certain circumstances, it added.
The financial details of the deal were not disclosed. As of 30 June, the company operated 293 Big Bazaar stores.
Future Retail operates a popular retail chain of Big Bazaar.
--With PTI inputs
Updated Date: Aug 23, 2019 12:48:30 IST