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Vishal Retail gets extension on its short-term loans

Vishal Retail gets extension on its short-term loans
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First Published: Tue, Aug 11 2009. 09 23 PM IST

 Long-term strategy: Vishal Retail’s group president Ambeek Khemka. Madhu Kapparath / Mint
Long-term strategy: Vishal Retail’s group president Ambeek Khemka. Madhu Kapparath / Mint
Updated: Tue, Aug 11 2009. 09 23 PM IST
Mumbai: Cash-strapped retail store chain Vishal Retail Ltd has rolled over Rs250 crore worth of short-term debt from various lenders.
Long-term strategy: Vishal Retail’s group president Ambeek Khemka. Madhu Kapparath / Mint
The loans taken early last year to fund the company’s aggressive expansion plans could not be repaid on time as it was severely affected by the economic slowdown, falling sales and high rental costs.
“We have spoken to our lenders and they’ve agreed to roll over the short-term loans,” group president Ambeek Khemka said. “It’s an ongoing process, where, as and when the due date comes up for a loan, it will get rolled over.”
LICMF Liquid Fund and LICMF Income Plus Fund had invested Rs100 crore in Vishal Retail’s commercial paper. This has been rolled over. DWS has Rs50 crore exposure to Vishal Retail through debentures, which was rolled over once six months ago and will be done again when it is due next.
The retailer has also extended the repayment period of a Rs50 crore loan from Bank of India. Similar arrangements have been made with HSBC, where loan repayments will get extended as and when small-ticket loans are due.
The company has also managed to convince lenders to reduce its debt interest costs. Apart from shutting down loss-making stores and downsizing existing ones, it is banking on strong sales during the coming festival season to help sort out its financial mess.
cnbctv18@livemint.com
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First Published: Tue, Aug 11 2009. 09 23 PM IST