Banks involved in the corporate debt restructuring (CDR) of defunct retailer Subhiksha Trading Services Ltd are seeking a two-month extension just days ahead of a July deadline, bankers with direct knowledge of the process said.
Financial troubles led to the closure of Subhiksha’s 1,600 stores nationwide earlier this year and left it owing around Rs750 crore to several banks. The retailer is asking forRs300 crore to get it back onits feet.
Two executives at two different banks that are part of the CDR process confirmed that the revival package for the Chennai retailer will miss its 31 July deadline. They did not want to be identified.
“We are seeking an extension of two months and it now depends on the CDR (office),” one of the bankers said.
R. Subramanian, Subhiksha’s managing director, declined to comment on whether the CDR would get delayed.
ICICI Bank Ltd, the leading lender to Subhiksha and the firm in charge of drafting the revival package, too, declined to comment.
The banker mentioned earlier said ICICI Bank has submitted its CDR proposal to the consortium of 13 banks involved in it, including HDFC Bank Ltd, Yes Bank Ltd, Standard Chartered Bank and the Hongkong and Shanghai Banking Corp. Ltd. The banks are studying the proposal but are unlikely to arrive at a decision soon, the banker said.
Kotak Mahindra Bank Ltd is not a part of the CDR and has filed a winding-up petition in the Madras high court to recover Rs40 crore owed to it by Subhiksha. The retailer faces similar winding-up petitions from other companies as well.
A winding-up petition is filed by a creditor asking courts to liquidate a defaulting debtor’s assets.