Future Lifestyle Fashions: CoC approves 2024 resolution

Resolution plan gets CoC approval

Future Lifestyle Fashions Ltd (FLFL), which is undergoing an insolvency resolution process, said its lenders have approved a bid submitted by a consortium of Space Mantra Pvt Ltd and Sandeep Gupta and Shalini Gupta. The company disclosed the development in a regulatory filing, stating that the Committee of Creditors (CoC) voted in favour of the consortium’s resolution plan. The approval was recorded as having taken place on September 27, 2024. FLFL did not disclose the financial or operational terms of the plan approved by lenders. The update is a key step in the Corporate Insolvency Resolution Process (CIRP), as CoC approval is required before a plan can move forward for adjudication.

What the company disclosed to exchanges

In its filing, FLFL said: “the resolution plan submitted by consortium of Space Mantra Pvt Ltd and Sandeep Gupta & Shalini Gupta is approved by the Committee of Creditors of FLFL on September 27, 2024.” The filing did not include any information on consideration, proposed recoveries for creditors, timelines, or any proposed change in management. The company also did not share whether the CoC approval was unanimous or by a specific voting share. Because the plan details were not disclosed, public information remains limited to the approval event and the procedural status described by the company.

CIRP timeline and extension request

FLFL also informed that its CIRP period ended on August 26, 2024. It said the Resolution Professional (RP) had filed an application before the National Company Law Tribunal (NCLT) on August 24, 2024, seeking an extension of the CIRP period. The filing, as provided, did not include the status of that extension application or the reasons cited for seeking it. The sequence indicates that the extension request was submitted shortly before the stated CIRP end date. The CoC approval of the resolution plan was reported later, on September 27, 2024.

Claims from financial creditors in the process

FLFL has reported claims aggregating to Rs 2,155.53 crore from 12 financial creditors as part of the CIRP initiated against the company. According to the data shared by FLFL on stock exchanges, claims of Rs 2,117.03 crore were provisionally admitted by the resolution professional. Claims worth Rs 38.5 crore were described as “under verification.” These numbers provide a snapshot of the creditor landscape and the scale of financial exposure being addressed through the insolvency process.

NCLT petitions and creditor actions cited earlier

Separately, FLFL had earlier informed markets that it was facing three petitions before the NCLT from creditors seeking initiation of insolvency proceedings. The company said these claims totalled around Rs 1,100 crore and were being defended before the NCLT, adding that “none of them has been admitted till date by NCLT,” as per the update cited. Among these, public sector lender Bank of India filed a petition claiming a default of Rs 495.91 crore under Section 7 of the Insolvency and Bankruptcy Code (IBC). Another financial creditor, Catalyst Trusteeship Ltd, approached the NCLT for claims of Rs 451.98 crore. An operational creditor, Lotus Lifespaces LLP, also moved the NCLT under Section 9, claiming a default of Rs 150.37 crore.

Asset monetisation, OTR and liquidity stress disclosures

FLFL had previously explored asset monetisation to pare debt, though it said the process did not materialise at that time. The company also entered into a One Time Restructuring (OTR) plan with lenders, with lenders implementing the OTR on April 30, 2021. In a later regulatory update, FLFL said that in view of non-repayment of principal due under the OTR, the company’s accounts were classified as Non-Performing Assets (NPAs) on May 31, 2022. It also disclosed that current liabilities exceeded current assets (including assets held for sale) by Rs 1,180.66 crore as on March 31, 2022. In addition, it reported a default of Rs 335.08 crore in principal repayment on loans from banks as on June 30, 2022.

Debt and default figures shared by the company

In another disclosure, FLFL said its total outstanding debt reduced to Rs 1,827.82 crore as of December 31, 2022. In the same update, it said total default stood at Rs 1,465.67 crore. The company added that the default comprised a “persisting default” of Rs 436.01 crore for the September 2022 quarter. FLFL also stated that total outstanding financial indebtedness declined from Rs 2,008.44 crore as of June 30, 2022, to Rs 1,827.82 crore as of December 31, 2022, attributing the reduction to repayments by the company.

Future Group context and the Reliance deal fallout

The broader context for FLFL’s stress has been shaped by the Future Group’s attempts to sell retail assets to Reliance. The transaction was described as a nearly Rs 25,000-crore deal, with a specific value of Rs 24,713 crore cited for the Reliance Retail deal. Reliance Industries Ltd later called off the Rs 24,713-crore deal after secured creditors voted against it, according to the information provided. Industry sources cited in the text said the group then focused on saving and rebuilding firms such as FLFL, Future Supply Chain Solutions, Future Consumer and Future Enterprises. The same set of inputs also described FLFL as handling the flagship fashion business of Future Group, with retail chains Central and Brand Factory and a portfolio including labels such as Lee Cooper, Champion, aLL, Indigo Nation, Giovani, John Miller, Scullers, Converse and Urbana.

Key facts at a glance

Why the CoC vote matters for stakeholders

A CoC-approved plan is a critical milestone because it signals lender alignment on a proposed resolution for the company under the IBC framework. For shareholders and market participants, the immediate limitation is that FLFL has not provided plan terms, making it difficult to assess recoveries, changes to ownership, or operational restructuring steps. For creditors, the claims admitted and under verification indicate the pool of liabilities that the plan may need to address. The company’s earlier disclosures on OTR implementation, NPA classification, and liquidity gaps provide background for why a formal resolution process progressed.

Conclusion

FLFL has informed exchanges that its lenders have approved a resolution plan submitted by the Space Mantra and Gupta consortium, with the CoC vote recorded on September 27, 2024. The company has also disclosed that its CIRP period ended on August 26, 2024, and that the RP had sought an extension from the NCLT on August 24, 2024. The next meaningful update for investors is likely to come from further disclosures on the plan’s terms or procedural developments at the NCLT level, if and when the company shares them.