NEW DELHI: Cash-strapped Kishore Biyani is offering to sell a significant stake in his crown jewel Future Retail to Amazon as the Indian retail major tries to pare its debt levels.Future Group is considering demerging the food business of Future Retail into a separate entity to make it compliant with India’s foreign direct investment norms, say sources aware of the developments. India allows 100% overseas capital in retail entities that deal only in locally sourced and packaged food items. Currently food accounts for more than half the sales of Big Bazaar hypermarkets, the flagship network of the BSE-listed Future Retail. Amazon already owns Amazon Retail India, a food retailing venture into which the Seattle giant seeks to invest about $500 million.Future Group did not respond to an email seeking comments till press time, while Amazon declined to comment. Last year, Amazon had teamed up with PE firm Samara Capital to buy the 500-store chain of More supermarkets from the Aditya Birla Group. 75589952One source said that the Amazon deal could be similar to the More buy-out. Amazon had used a rarely used class of shares to acquire 49% of Witzig Advisory Services, the company that has bought More stores from Aditya Birla Group. Amazon had bought a 17% stake in the company through Class A shares and the remaining 32% through Class B shares having differential voting rights. While each Class A share will have one vote, the Class B shares have no voting rights.If the deal goes through, this would be Biyani’s second deal with Amazon. Last year, Amazon had purchased a 49% stake in Biyani’s Future Coupons, which owns 7.3% of Future Retail, with an option to buy the entire holding at a later stage. That deal gave Amazon roughly 3.6% in India’s largest listed retail entity Future Retail.In recent months, high debt levels at the holding company level and the crippling blow to its sales dealt by the coronavirus pandemic has prompted Future Retail shares to plunge. These developments have forced Future Group to explore possibilities including a significant stake dilution in Future Retail and a merger of insurance joint venture Future Generali with bigger, well capitalised players.Then last month, Biyani’s holding company Future Corporate Resources defaulted on its debt payments prompting IDBI Trusteeship Services to invoke pledged shares in Future Retail. However, Future Group received a breather when the Bombay HC late last month restrained IDBI Trusteeship and others from selling the pledged Future Retail shares until further orders.