On Thursday, shares of Future Retail Ltd declined as much as 4.91 percent to an intraday low of Rs 100.5 after tit informed the stock exchanges that it has defaulted on the payment of interest due on the USD Notes (listed on Singapore Stock Exchange) on 22 July 2020.
"We would like inform that due to the nation-wide lock down imposed to restrict the spread of COVID-19 pandemic, and consequent restricted business operations of the Company the liquidity position has been affected causing us to miss the service of the payment of interest due on the USO Notes (listed on Singapore Stock Exchange) on 22nd July, 2020," the statement said.
The Kishore-Biyani led retail chain also said that it is proposing to pay the interest within 30 days from the due date, as per additional period allowed under the terms of issuance of the USD Notes.
"We are in the process of ensuring that payment of such interest is made within this additional time period," the statement added.
According to a Times of India report, citing a note by rating agency Standard & Poor (S&P) the default is on a Rs 100-crore ($14-million) repayment on bonds worth $500-million. S&P has warned that it could downgrade the company's rating to 'Default' if it feels that the company is unlikely to repay in the 30-day grace period.
At present, Future Retail is rated 'CCC-', which is a speculative-grade rating.