IndiaRetailBiz

The contours of financial package for stabilising operations of financially stressed value retailer Vishal Retail have begun emerging. The Delhi-based retailer owes around Rs 730 crore to a consortium of around 13 banks. Of these 13-odd banks, Vishal owes an amount of about Rs 170 crore, or nearly one fourth of the total, to State Bank of India (SBI).

It is expected that restructuring of debt under “Corporate Debt Restructuring (CDR) programme of RBI will take about 60 days to complete.

“We are looking at a loan extension from banks and hope to achieve a conclusion soon,” said Ambeek Khemka, Group Vice-President, Vishal Retail.

Under restructuring package under consideration of banks, the lenders may allow Vishal Retail to enjoy a maritorium period of four years on repayment of loans as well as payment of interest charges. The interest liability on debt is currently placed at around Rs 100 crore per annum. This will give necessary breathing space for the retailer to reorganise its business and come out of the cash crunch situation.

The retailer on its part of the deal will be required to close down a few of the 180 stores that are under performing. The retailer will also be required to infuse equity funds by way of issue of new equity. This will result in dilution of equity stake for promoters. The company was founded and promoted by R C Agrawal, its present Chairman.