Mumbai: Vishal Retail Ltd said on Wednesday its board has approved the terms of an agreement with private equity firm TPG VW Ltd in accordance with the debt restructuring scheme approved by the company’s lenders.
The agreement with TPG is subject to negotiations and executions of definitive agreement, the company said in a statement to the stock exchange. No other details were provided.
Vishal Retail founder and chairman Ram Chandra Agarwal declined to give any immediate comment when contacted by Reuters.
Vishal was in talks with TPG and may close a deal in 2-3 months, Agarwal had told Reuters earlier this month.
Vishal Retail, which runs a chain of 170 stores across the country, ran into difficulty in late 2008 after it failed to raise equity amid an economic downturn which also hit sales, leaving it with a debt of about Rs7,350 crore.
The company approached lenders in November for debt restructuring.
As per negotiations between Vishal and TPG, the private equity firm was to set up a wholesale company, Agarwal had said.
The assets and liabilities of Vishal were to be transferred to the wholesale company on a slump sale basis, he had said, adding that Vishal Retail would cease to exist after the deal and he would hold no stake in the new company.