IndiaRetailBiz

Vishal Retail, financially stressed Delhi-based multi-products retailer which for months has been forced to put expansion on hold, has bought peace with its institutional lenders by signing a deal to kickstart the process of restructuring debt.

The deal has been inked with lending banks like with SBI, HDFC and HSBC to whom the retailer owes major part of debt of around Rs 730 crore.

“The agreement with our lenders has been signed and the corporate debt restructuring (CDR) process will begin within the first half of November,” said Ambeek Khemka Group President Vishal retail to PTI. The company is confident of completing the process of CDR in 100 days, according to Khemka. Scoffing the rumour of banks insisting on the condition of Company’s founder and Chairman Ram Chander Agarwal resigning from the Board, Khemka said, “There is no such condition. The CDR is an open-ended business and any decision will be made only after the process is completed.”

It may be interesting recall that another retail wonder “Subhiksha” which also grew at breakneck speed during heydays of retail was unable to complete the process of CDR initiated by the banks. Of course, while the two companies grew at a much faster pace than most others, there situations are not quite comparable.

The retailer, which operates around 170 mega (mini- hyper market format) stores across the country has been battling hard for cash as most of the funds raised by the company through hugely successful IPO and debt from banks has been invested in capital intensive expansion of retail chain which has failed to generate adequate cash flows to service the same.

Although, the retailer in the past few months had initiated several measures to restructure the operations, it was unable to stem the rot that had arisen due to the double whammy of falling footfalls and shrinking customer basket faced by the company in 2008-09. Interestingly, Vishal has held last year’s global economic slowdown for most of its woes.