New Delhi: Managing director of beleaguered discount retailer Subhiksha Trading Services Ltd,R. Subramanian, said he expects lenders to chip in with much of the amount needed for restructuring the retailer, a senior bank executive familiar with the development said.
“He (Subramanian) said a large chunk of the Rs300 crore has to come from bankers and the balance has to come, if at all, from investors,” added the person, a senior executive of a bank who did not want to be identified given the sensitivity of the issue.
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The executive said Subramanian, however, had not elaborated on how much money he expects from the dozen-odd lenders. “He knows that before CDR (corporate debt restructuring) nothing can happen,” said the banker, who attended a Tuesday meeting between Subramanian and the banks.
During the meeting in Chennai, Subramanian briefed banks on the company’s situation.
Tight lipped: Subhiksha Trading Services’ R. Subramanian. Harikrishna Katragadda / Mint
“He discussed whatever was in the media and the status of the stores,” said the executive. The executive, however, said that Subramanian could not provide any information on the status of inventory, among other things, in various stores because he said he didn’t have access to those stores. “He (Subramanian) mentioned he won’t be able to give information on inventory as he doesn’t have access to stores.”
Subhiksha has claimed that several of its stores across the country have been vandalized with looters walking away with stock in many cases.
The banker said that Subramanian had told the lenders that the company had not filed police cases at every location where this happened because it did not have people in those locations to file the cases.
Earlier this month, Subhiksha, which has shuttered some of the stores it operates, said the company has a total debt of about Rs750 crore. Meanwhile, the executive said banks were “concerned” about where the additional revival money would actually come from. “The bankers are saying that investors should put the money first.” He added that this issue may never be resolved.
Subramanian declined comment and said his company did “not comment on private meetings between us and our banks”.
ICICI Bank Ltd is working on the debt restructuring plan on behalf of the bankers because it has the most exposure to Subhiksha, the executive added.
“How successful the CDR would be for a retail company nobody is aware as it never happened before… It happened for a manufacturing company where the plant (was) put off for two years and again one fine day when you have the money you can start again,” said the banker. “Here you only have stocks that are perishable commodities. Most have already perished and whatever hasn’t perished has been looted.”