Vishal sells retail, wholesale business for Rs100 crore

Beleaguered retailer Vishal Retail’s board has finally arrived at a consensus on the sale of the retail and wholesale business.

The board on Monday said it had decided to sell the businesses for Rs100 crore. While the retail business will go to Chennai’s Shriram Group, the Indian subsidiary of Texas Pacific Group (TPG) Ltd will take over the wholesale, institutional trading and franchising business.

Both the undertakings - retail and wholesale - will be sold on a slump-sale basis with all assets and certain identified liabilities, Vishal Retail told BSE on Monday.

The sale does not include its four properties in Hubli, Kolkata, Dehradun and Jabalpur.

RC Agarwal, chairman, Vishal Retail, did not respond the queries citing a “non-disclosure agreement”.

A TPG official in India said there was still time before the deal would come by because of regulatory approvals and Vishal’s shareholders’ approval that will come through a postal ballot late next month.

The retailer, which operates stores under Vishal Fashion, Vishal Megamart formats, has been cash-strapped for two years, with a debt of Rs730 crore. Its amusement park and promoter company, Vishal Water World, has land assets worth Rs60 crore and a reserve of almost Rs40 crore. Vishal Retail was earlier going to merge this promoter company with itself to bring the debt down by selling land assets, but had later withdrawn the merger.

During the corporate debt restructuring (CDR) process last year, the company had said it has 13 lenders in all and State Bank of India was one of the main lenders.

The retailer had reported a net loss of Rs19.48 crore on net sales of Rs335 crore for the April-June period.

Total retail sales in India will grow to Rs25 lakh crore in 2014, from Rs16.3 lakh crore this year, according to a report from Business Monitor International in May. 

With Agency inputs
s_shailaja@dnaindia.net