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.

Founded in 19991 by K Raheja group, Shopper’s Stop, currently operates around 27 stores and occupies a total retail space of 1.88 million sq ft. It is looking at setting up 15 to 18 new stores of its flagship chain operating under its own name. The expansion will take the tally of its stores to around 45 stores in the next 3 to 3.5 years by March 2013. Each of the new stores is expected to require an investment of Rs 12 to 15 crore.

Shopper’s Stop is also raising an amount of Rs 100 to 120 crore to exercise its option of purchasing additional 32 per cent stake in HyperCity– a hypermarket format, retail chain owned by the group. HyperCity is currently operating three stores at Malad (Mumbai), Vashi, and Hyderabad. The purchase of additional 32 per cent stake will help Shopper’s Stop become majority shareholder in HyperCity as its stake will then rise from present 19 per cent to 51 per cent. Shopper’s Stop can exercise purchase option up to June, 2010.

Coming out of the specter of falling footfalls and declining ticket size last year, Shopper’s Stop has recorded a rise of 7 per cent in sales to Rs 720 crore during the first six months of this fiscal (April-September, 2009). The rise in sales (Rs 413 crore) was even more significant at 11 per cent during the latest quarter ending September, 2009.

Thanks to several measures of cost cutting and increase in sales, the lifestyle retailer was also able to earn a net profit of Rs 12.06 crore in the last quarter as against the loss of Rs 11.02 crore for the same quarter of the previous year.

“The net profit,” according to Govind Shrikhande, President & CEO, Shoppers Stop, “was due to a combination of cost reduction, maintained margins and increase in sales.”

Among the several cost cutting measures, top management of the company, agreed to take a cut of 15 per cent in its salaries. During the difficult period, Shopper’s Stop refrained from resorting to retrenching of staff, it also refrained from hiring new staff and met requirement of new stores through existing people.

Apart from operating large format, flagship, department format, retail chain, Shopper’s Stop also operates several other home and specialty retail chains. Besides, Crossword– a leading specialty books and leisure chain– Shopper’s Stop is operating retail stores of well known global brands including M.A.C cosmetics (under a retail agreement with Estee Lauder), Mothercare (under distribution tie-up), and Mustang (German lifestyle and jeanswear) in India.

If the IPO route is chosen, Domino’s will be the first publicly traded fast food retail chain on the stock exchanges of India.

Nearly, 14 years after its foray into the country, Domino’s Pizza is among the most admired and fastest growing multi-national consumer brands in urban India. It is currently (as of August 2009) the largest fast food chain employing a work force of around 6,000 persons and operating 274 quick service restaurants (QSR) across 54 cities, in 20 states and UTs, of the country. The company is planning to expand network by adding 70 new restaurants to the retail chain.

The first Domno’s Pizza restaurant was launched in January, 1996 at New Delhi. Apart from quality of its pizzas, the brand has earned its reputation as a ‘home delivery’ specialist capable of delivering its pizzas within 30 minutes.

Pantaloon Retail, which operates several multi-format, multi-products retail chains across segments, is expecting to achieve annual revenues of more than Rs 10,000 crore (over $2 billion) this fiscal (ending June, 2010), has announced the target of crossing Rs 25,000 crore in revenues within the next three years (2012), according to the group’s CEO Kishore Biyani, may revisit earlier plan of unlocking the values of its biggest retail chain Big Bazaar.

“There are opportunities which we are looking at, including whether one should knock-off Big Bazaar into a separate company and probably look at listing or a follow up offer on that,” Future Group Chief Executive Officer Kishore Biyani said.

The plan of hiving off Big Bazaar is not frozen yer and is being considered as one of the options to raise resources.

“There are possibilities (on hiving off Big Bazaar) but nothing is on the cards at this moment. It depends on the fund raising exercise,” added Biyani.

The earlier plan of carving out Big Bazaar into a separate entity–although requisite approvals were obtained for the same– was put on the back burner by the company due to negative capital market sentiment following global economic slowdown.

Big Bazaar– though not flagship– is the single most important, retail chain of the group. Big Bazaar, part of the ‘value’ segment that accounts for over 60 per cent of the group’s retail turnover, is the biggest and most successful, hypermarket format chain which operates 118 stores across the 71 cities of the country. Apart from regular hypermarket format, Big Bazaar has also carved out Big Bazaar Express and Big Bazaar Best Deals sub-formats to cater to specific market and customer needs.

“As of now the Rights Issue we had planned is not happening. Whenever we have requirement of money for expansion we will approach the capital market,” said Nagesh while speaking to media-persons in Mumbai on the sidelines of India Retail Forum conference.

The company had earlier proposed to raise between Rs 300 to 350 crore through rights issue to fuel its expansion and raise its equity stake in HyperCity (another K Raheja group company). The expansion will now be funded through internal resources.

According to Nagesh, the company will invest Rs 35 to 40 crore to open four new Shoppers Stop stores during the financial year 2009-10.

The group, according to an earlier announcement, is expecting to add 500,000 sq ft space during this fiscal with by opening four new Shoppers Stop (department store format) flagship stores and 3 new HyperCity (hypermarket format) stores. After addition of new stores, the group by 31st March, 2010 will be operating 31 Shoppers Stop stores and 7 HyperCity stores. The group is currently occupying 1.8 mn sq ft of space.

Shoppers Stop is currently holding an equity stake of 19 per cent in HyperCity. It has an option of raising the stake to 51 per cent by June, 2010.

Talking about sales outlook, Nagesh said that the same store sales (an important metric to judge performace and trends in retail business) are expected to show flat-to-positive growth in the next six months.

The retail carpet area will go up from 12 million sq ft at present to 30 million sq ft at an investment outly of Rs 3,000 to 4,000 crore ($600 mn to $800 mn), says Biyani.

The group’s retail business, expected to cross Rs 10,000 crore (over $2 billion) this year, will also grow to Rs 25,000 crore (over $ 5 billion) in the next four years.

“We will be a very dominant player in the consumption business with around Rs 25,000 crore of sales in next 3-4 years. That is quite meaningful and impactful,” said Biyani, adding that the group would clock a turnover of Rs 10,000 crore this fiscal.

Resources for required for fueling the targeted growth will not pose a problem as the group can leverage on its current financial strength as reflected through its low debt:equity ratio of 1.2. ‘Gearing’ (or debt:equity ratio) of a business indicates its ability to raise resources through borrowing. Lower the ratio, better the capacity to borrow as the business capable of servicing its financial obligations.

On being asked about the resources, Biyani said, “We can leverage substantially.” According to Biyani, the group would look at different options, including selling of non-core assets.

Talking about profitability, Biyani said, “We will have earnings before interest depreciation taxes and ammortatisation (EBIDTA) margin of eight to ten per cent of the Rs 25,000 crore turnover. You can calculate how our profitability will be.”

The retail business post expansion would, therefore, be able to generate cash surplus of Rs 2,000 to Rs. 2,500 crore per year, subject of course to payment of taxes and disbursement of dividend to shareholder, if any, against the same.

Future group through its retail arm Pantaloon Retail India Limited currently operates several multi-format, pan-India retail chains across ‘value,’ ‘lifestyle,’ and ‘home retail’ segments. Pantaloon currently operates over 1,000 stores in 71 cities and 65 rural locations across India.

Among several large pan-India retail chains operated by the group include: Pantaloons (flagship, department store format, lifestyle, fashion, chain), Big Bazaar (hypermarket format, general merchandise, value, chain), Food Bazaar (supermarkets style, value, food chain), Central (chain of seamles destination malls), e-Zone (speciality format, durables, lifestyle, chain), Brand Factory (fashion, value chain selling braded apparel at factory ‘gate’ prices), Ethnicity (ethnic, fashion and home products, lifestyle, chain) and Home Town (home retail) chains. The group is also operating ‘Aadhaar’– a rural retailing chain.

After setting up five hypermarket stores in quick succession at Mumbai, Mysore, Aurangabad, Indore and Bangalore (while Mysore store was acquired, the second hypermarket store at Vadodara has been closed), the retailer is looking forward to setting up three more hypermarket stores and over 50 supermarket stores this financial year before 31st March, 2010. This will take tally of the stores under two formats (super and hyper) to over 700 in this fiscal. In the next 5 years, the retailer is aiming to expand its presence five-fold as it is planning to occupy total space of 10 million sq ft by 2015.

Thanks to the acquisition of Hyderabad-based Trinethra retail chain in 2007, bulk of the retail chain’s supermarket stores, numbering around 400, are located in the South. After being renamed, all Trinethra stores, are now also operating under the brand name of ‘More’ or ‘More for you.’

The Rs 1,130 crore retail outfit of the group is expecting its Southern stores to begin making profit in the next few months. The turnaround in this region makes commercial sense as the stores in the South– most of which were operating as Trinethra outlets– are much older in age than their counterparts in other regions.

After pruning non-performing stores, productively utilising space, optimising displays and SKUS, and keeping property rents below 5 per cent of expected revenues, ABRL is expecting to fully turnaround operations of the company within three financial year by March 2013.

“We are half-way down the walk and we have another half-way to cover in the next 2-3 years,” said Verghese.

While, ABRL continues to remain averse to strategic partnerships with foreign partners, it is open to further acquisitions within the retail space. Having pruned down original plan of investing Rs 10,000 crore in the retail business, the company, according to Verghese, will approach capital market with IPO only after it has broken even.

While, the Delhi-based home goods, value, retailer, which currently operates around 170 large format (mega) stores across the country, has closed some 12 non- performing stores and removed around 6,000 employees in the past few months to come out of its financial woes, it’s going to be a long and arduous journey for the company to restore confidence of its stakeholders including lenders, employees, vendors, and investors, among others.

According to a Live Mint report, the cash strapped retailer, which carries a debt burden of around Rs 730 crore, has now begun to even offer the company’s equity shares in lieu of outstanding payments to its vendors.

While, asserting that “nothing of this sort is happening” the company Chairman has, however, conceded to the newspaper “… If any supplier is interested in having stake in the company while having faith in its future, then we would welcome them to be our stakeholders as this will bring in more sense of belongingness, which will only benefit us in the long run.”

Agreeing that “cash flow is under stress” Agrawal has also confirmed that “the worst is not over yet.” According to him, “The company is gradually moving towards normalcy and lot more is being done before we say that the worst is over.”

Despite several measures undertaken by the company to stem the rot, including freeze on further expansion, situation continues to remain grim. “In the present situation, very few suppliers will give credit to the company,” said an erstwhile apparel vendor of the company.

Vishal Retail, it may be recalled, was once a darling of equity investors. They had lapped up the company’s Rs 10 equity shares at a premium of Rs 270 each in the IPO during the boom days for retail sector in July 2007. The IPO was oversubscribed 81 times. The equity share, which once touched the dizzy heights of Rs 1001, is currently selling at around Rs 60 each.

The business, which was badly affected due to decline in demand as a consequence of global economic downturn, resulted in closure of over 100 stores in the last 12 or so months across the country. Apart from draining resources, these under performing stores were incurring huge expenses on salaries and rentals, resulting in non-viable operations.

The days of closing down of store are now behind the company and it has again begun to expand its retail network, though cautiously.

“The period of shut downs is now over. We have opened five large format stores during past three months and all have reported sales more than double the normal sales rate. So we are optimistic about revival,”  said SanjivGoenk, Vice Chairman of the Company, while speaking to reporters in New Delhi.

Although, the sales are showing signs of revival, they are still not enough to take the company “out of woods,” said Goenka. While, the company has recorded growth of 18 per cent in the same-store-sales, in the last 3 months, however, there is still a need for them to grow further. The costs should also come down substantially to make the operations profitable.

“Rentals are still very high despite dropping by an average 20 per cent or so,” said Goenka (ET report). The company has so far been able to prune rental costs by 12 per cent, according to Goenka.

Spencer’s is looking at breaking even its operations at store level within the next 6 month, while the break even at the company level, according to the report, is expected within a period of the next 12 months.

Under the circumstances, the company is cautious on expanding its network. While, the retailer has opened 5 new stores in the last 3 months, it is planning to set up another 10 during the financial year, at an investment of Rs 100 crore.

In order to raise further resources, Spencer’s is looking at diluting 10 per cent of its equity in favour of private investors. It is believed to have already begun talking with a few investors in this regard. The company will look at raising equity through IPO only after it achieve break-even. Spencer’s is also exploring induction of a multi-national retail player partner to sore up its back-end operations. The tie-up could be lines of Bharti-Walmart joint venture.

“We have various plans for the company. Offloading the non-core assets of Pantaloon to raise close to Rs 300-500 crore is one of them,” Future Group CEO Kishore Biyani said.

Pantaloon Retail, it may be recalled, had earlier initiated plan to recast the company into multilayer structure with a view to induce foreign capital, however, the plan despite shareholders’ approval, had to be put on back-burner due to lack of clarity on policy guidelines relating to infusion of foreign investment in subsidiary companies.

Current policy guidelines on Foreign Direct Investment (FDI) in retail prohibit entry of foreign capital in multi-brand front-end retail. Up to 51 per cent of foreign equity can, however, be brought into single brand retail business.

With a view to ensure that the company’s plans are in tune with present policy guidelines, Pantaloon Retail, according to its managing director Kishore Biyani, will float a special purpose vehicle (SPV) to raise funds from outside investors.

The statement of ICICI Bank assumes significance as it has come subsequent to filing of a ’scheme of arrangements’ under Section 391 of the Companies Act. Subhiksha wants the consortium of all its 13 lending banks led by the ICICI Bank to take a 50% hit on the amounts the retailer owes to its lenders. Subhiksha, according to the scheme of arrangements, is said to be agreeable to put in Rs 250 crore in operations of the company.

If the Court accedes to the Bank’s lates submission, it may become extremely difficult to revamp the working of the retail chain. The lending banks have already provided for most of their dues against the company in their books.

The retailer, it may be recalled, for last over six months, has been pinning its hopes on receiving Rs 300 crore in financial assistance from the consortium of lending banks to partly revive its operations. ICICI Bank is apart from being a lead bank in the consortium of lenders is also part holder of equity (23 per cent) stake in the company through its private equity arm I-Venture.

The financially troubled retailer, it may be recalled, was forced to shut down operations of all its 1600-plus stores across the country from January, 2009. Much of the Rs 870 crore received in debt from a consortium of 13 banks is believed to have gone in funding expansion of the company during 2008.

Subhiksha Trading Services Limited, the company which owns the now defunct retail chain, was founded and promoted by R Subrahamanyam, a local banker turned retailer. Apart from banks, the retail chain is also owing large sums of money to vendors, service providers, property owners, and workers, among others.

Apart from experiencing falling footfalls and declining basket size (average invoice value) due to global slowdown, the highly leveraged retail chain was facing the problems of high interest cost and paying heavy payroll expenses.

On both the counts, the company, according to a BS report, appears to have succeeded. Vishal has been able to bring down the number of employees by a whopping 45 per cent from nearly 16,000 a year ago to 8,500 now. The company has also been able to address the problem of high interest cost by bringing it down from Rs 10 crore a month earlier to Rs 7.25 crore a month now. The interest cost has mostly come down due to negotiaon of interest rates with the lenders. Against a high rate of 15 per cent per annum the rate has now come down to 9.75 per cent. What is most worrying, however, is the fact that the company continues to carry a high debt burden of Rs 730 crore at an extremely debt/ equity ratio of 1.7.

“We have told the bankers that ours is a profit-making business model. All we need is some leniency in the rate of interest, so that we could make a comeback,” said Ambeek Khemka, group president.

Unless the company resorts to further dilution of some of its investments in assets, or inducts fresh equity capital in the system, it will be extremely difficult for the retailer to improve upon its leveraged position.

One of the major reasons for highly leveraged position of Vishal Retail could be attributed to the policy of going in for ‘unbridled expansion’ of its retail network. At one point of time, the number of its stores had crossed 184 while the space occupied by these stores had almost touched three million sq ft.

Most of the Vishal’s expansion like many other fast growing retailers (like Subhiksha) was funded via short term funds in the hope that fresh infusion of capital will help replace these high cost, low maturity funds.

The sudden plummeting of equity markets, however, led to a situation in which there was a sudden evaporation of capital from the markets. Even the plan for dilution of promoters’ equity stake could not fructify as most of the potential buyers themselves were struggling for raising funds and at the same time pruning their own operations.

“Excess short-term debt, coupled with plans of equity fund raising falling apart owing to poor market sentiments, led to sub-optimum capital mix and increased interest burden,” said Khemka.

Vishal Retail, which has now begun to clock over Rs 100 crore in monthly sales, is looking at closing down 20-odd stores to further rationalise its business. It is also looking at optimising employee expenses by cutting down on travel and communication allowances, particularly that of the top management, including the president.

“We are looking at increasing our per-employee productivity and this is one step in that direction,” Khemka added.

Cash and Carry Wholesale, a shareholder of Subhiksha, has  filed a court petition under Section 391 of the Companies Act, that seeks to arrive at a compromise between Chennai-based cash starved retailer company and its creditors.

“We have been informed and notified that Cash and Carry Wholesale Traders Pvt Ltd, the promoter of Blue Green Construction and Investment Ltd, into which we are merging has filed a Section 391 petition before the High Court,” said R Subramanian, Subhiksha Trading Services Ltd’s promoter, founder, and managing director in statement.

A company and its creditors can meet and arrive at a consensus on any matter under the provisions of section 391 of the Indian Companies Act, provided such a meeting has been held under the orders of a competent court.

Subhiksha it may be recalled was forced to suspend operations of over 1,600 convenience stores discount chain in January, 2009, as it ran out of cash to meet obligations of its lenders that among others included banks, vendors, service providers, property owners and employees. Subhiksha is believed to be owing about Rs 800 crore to a consortium of 13 banks, including Kotak Bank (Rs 40 crore) which has petitioned the Madras High Court to wind up the operations of the cash strapped company.

To revamp its suspended operations, albeit on a small scale, Subhiksha sought assistance of Rs 300 crore from its lenders under RBI’s CDR scheme. However, despite agreeing in principle to arrange induction of Rs 250 crore, the retailer failed to obtain approval of its lenders to its proposal within the stipulated time period of six months (up to 31st July, 2009).

Subhiksha, according to the statement, however, is still hopeful of resuming its activities in the next 3 to 4 months as its management is working with lenders on restructuring the troubled firm.

The raised capital, according to group founder and CEO, will be utilised for adding trading space of around 3.5 to 4 million sq ft to the existing space of around 15 million sq ft.

“Capital expenditure is Rs 700-crore this year. We will add another 4-million sq ft of retail space (to the existing 15-million sq ft presently under operation),” Kishore Biyani, Founder and CEO, Future Group, told reporters in Mumbai on Tuesday.

PRIL, which according to preliminary estimates achieved sales growth of 29.43 per cent last fiscal (2008-09) ending 30th June, 2009 (nett sales Rs 7,179 crore in 2008-09 against Rs 5,547 crore in 2007-08), is looking to grow at 35 to 40 per cent per annum by focusing on its core businesses of food, fashion, and home.

PRIL has recently raised Rs 367-crore via preferential allotment of shares and warrants to its promoters. It is also said to be in talks with Carlyle, Bain Capital, Blackstone, and Kohlberg Kravis & Roberts for infusing private equity (PE) capital of around Rs 1,200-crore.

PRIL had earlier announced its intention to raise capital of around Rs 1,500-crore through preferential allotment of shares to promoters and private equity funding to realise its growth plans. The company may now be also looking at raising funds through a mix of debt and equity.

“We are looking to raise funds through both debt andequity. We are talking to some banks currently,” said Biyani while refraining from divulging further details.

“The realignment is not happening right now. There are some legal issues. We are waiting for feedback from our legal team on this,” said Kishore Biyani, founder and CEO, Future Group, while speaking to reporters at Mumbai on 4th August, 2009.

Future group, it may be recalled in April this year, had unveiled a plan that will realign businesses of PRIL into a multi-tiered structure under the new name of Future Merchandise & Consumer Group (FMCG Ltd). PRIL wanted to attract a large amount of foreign capital in mult-brand retail via a web of subsidiary companies as infusion of foreign capital (FDI) for multi-brand retail is currently banned in India. The group is constantly looking for resources to fructify its expansion plans.

Although unsure of how long it would take to achieve the realignment, Future group is sure of its intention to implement the same as soon as feasible.

PRIL, the retail arm of Kishore Biyani-led Future group, opertes several multi format retail chains like Big Bazaar, Pantaloons, Central, Home Town, e-Zone, Ethnicity, among others, across value, lifestyle, and home retail segments.