Vishal Retail set to rope

Supermarket-chain retailer Vishal Retail, which has been seeking a corporate debt restructuring (CDR) fix since November, 2009, may have found a strategic investor in private equity firm TPG Capital (formerly known as Texas Pacific Group).

TPG is eyeing a majority stake in Vishal Retail, CNBC TV18 reported on Friday. Ram Chandra Agarwal, CMD of Vishal Retail, who holds 60% in the company, is reportedly willing to dilute his holding in order to get a strategic investor in.

There is no confirmation on whether Vishal Retail is awaiting proposals from other private equity players. The company has said it is still evaluating proposals.

The retailer has been itching to get a strategic investor who could pump in over Rs 250 crore.  Its current debt stands at Rs 730 crore.

CDR will help it address the credit problem. However, it needs a fresh infusion to take the business forward and for that, a strategic investor would need to step in as expansion will require more capital.

The company had recently merged Vishal Water World Ltd, an amusement and water park project and a promoter company, into itself with the motive of growing the promoter holding in retail
business and reducing its debt.

Vishal Water World had land assets worth Rs 60 crore and a reserve of almost Rs 40 crore. Likelihood of the company striking a CDR deal came under doubt on Wednesday, when it  announced that its group vice-president, Ambeek Khemka, who was spear-heading the CDR deal, had quit.

Khemka could not be contacted. The company said he had quit in order to pursue other industry opportunities.

Promoters and lenders will be meeting in a week over the change in management and to discuss the course ahead on CDR. The last joint lenders’ meeting was held on January 30.

While it looks for a replacement for Khemka, Vishal Retail has appointed its senior accountant Anil Khatri as consultant to take care of banking relations —- something Khemka used to handle.

Khemka had earlier told DNA the retailer will resume footprint and store expansion only after a year and half.