(Bloomberg) — Debt-ridden Indian retailer Future Retail Ltd. slumped in credit markets after missing a dollar bond interest payment Wednesday, the latest sign of mounting strains in the nation from the pandemic.
The company’s dollar notes slid 8 cents to 53 cents on the dollar on Thursday morning, the biggest drop in over three months, according to Bloomberg-compiled prices. Amazon.com Inc. has an indirect stake in Future Retail and a partnership with the company.
“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,” Future Retail said in a statement on the Singapore Exchange late Wednesday. Read more details here.
The retailer’s debt woes add to further signs of pain in India, which is hurtling toward its first economic contraction in more than four decades. The country is also struggling with one of the world’s worst bad loan ratios.
Future Retail said it is in the process of ensuring that payment of the interest is made within a 30-day grace period. S&P Global Ratings warned on Wednesday that even if Future Retail makes its payment, its weak liquidity remains an “overarching credit risk.”
Amazon and Future Retail signed a pact in January for Future Retail, a brick-and mortar retailer, to sell everything from groceries to cosmetics, through Amazon’s sales channels.
(Adds chart and details on Amazon’s partnership in sixth paragraph)
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