IndiaRetailBiz

Even as Subhiksha, the Chennai-based cash strapped, food and grocery, discount retail chain, battles hard in the Madras High Court, to defend legal cases filed by some of its stake-holders, its founder, promoter, and managing director R Subrahmanian is confident of completing the process of obtaining financial bailout package from its lenders.

The financial package is being processed under the CDR programme of Reserve Bank by 12 of the 13 consortium members led by ICICI Bank. The dedline for finalising the process under the scheme will come to an end by 31st July, 2009. While, one of the consortium members Kotak Mahindra Bank has withdrawn from the process, six of the remaining 12 consortium members are ready to participate in the CDR. The remaining six members, though, are said to be also participating in the revival process.

“Twelve of the 13 bank lenders together with the three major shareholders are thrashing out the contours of the debt restructuring as well as the funds infusion into the company to revive operations. The contours of the revival plan of the company have been agreed (upon),” said R Subramanian in a statement.

“The deadline for closure of CDR is July 31, 2009, and the company is confident that the process will be completed well before that date,” added Sbrahmanian.

While, Kotak Mahindra Bank having filed a winding up petition against the company has withdrawn from the CDR process, “…all the other 12 banks, including the six banks that are part of the CDR and the other six which are not part of CDR, have all been working together on the revival package,” said Subrahmanian.

Subhiksha, according media report, is also believed to have filed a counter petition against Kotak Mahindra Bank in the Madras High Court.

According to Subrahmanian, various stakeholders of Subhiksha are agreeable to finance the revival mainly through equity. Subhiksha, it may be recalled, before suspension of operations of 1,600-odd stores across the country had asked for a debt restructuring of Rs 300 crore. Subhiksha is believed to be owing slightly more than Rs 550 crore to banks, while overall liability to employees, vendors, property owners, and service providers, among others, may be in excess of Rs 750 crore.

According to reports, ICICI Bank has an exposure of over Rs 180 crore, while HDFC Bank has the exposure of around Rs 150 crore. Bank of India, Federal Bank and Yes Bank have exposures of Rs 50 crore each, while Bank of Baroda may be carrying debt of Rs 75 crore in its books.