The banks are negotiating with Subhiksha to explore the possibility of an easier repayment schedule on the Rs 800 crore worth of loans they have advanced.
Embattled retail chain Subhiksha said the Madras High Court has granted its appeal for staying an earlier order appointing a provisional liquidator in a winding-up petition filed by Kotak Mahindra Bank.
The bank, one of the 13 financial institutions which have exposure to the 12-year-old retail chain, had broken ranks with others and filed a winding up petition against Subhiksha in the Madras High Court four weeks ago.
The banks are negotiating with Subhiksha to explore the possibility of an easier repayment schedule on the Rs 800 crore worth of loans they have advanced to the company.
Kotak Mahindra, which is estimated to have an exposure of Rs 40 crore to the chain, alleged that Subhiksha’s case was not of normal bankruptcy but one of siphoning off of funds by the promoter, R Subramanian. The single judge had appointed the provisional liquidator before Subhiksha presented its arguments in court.
Subramanian, who is trying to resuscitate the closed down discount store, pointed to the stay on operations of the liquidator as vindication of his argument for more time. “It is pertinent to note that this stay has been granted only after hearing the counsel representing Kotak Mahindra Bank and after considering their representations,” he said on the stay order.
Kotak Mahindra Bank did not confirm whether the earlier order had been stayed or not.
The court had earlier asked Subhiksha to submit all its accounts for the last three years for scrutiny by the liquidator by April 27. It was not clear whether that order was also stayed.
Subramanian has maintained that he is trying to raise around Rs 300 crore to restart the operations and it was premature to wind up the company now.
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