Mumbai: Vishal Retail said on Monday its board has approved the sale of its retail and wholesale businesses to Shriram Group and the Indian unit of TPG, respectively, for a total consideration of Rs100 crore.
The sale does not include the New Delhi-based firm’s properties in Hubli, Kolkata, Dehradun and Jabalpur cities, the debt-ridden retailer said in the statement to stock exchange.
The company, which runs stores under brands such as Vishal Megamart and Vishal Retail, had in June said, without giving financial details, TPG would buy its wholesale operations.
“Good part about the deal is, Vishal Retail would now open in course of time... and it is now going into the strong hands of people who know how to run this business,” Arun Kejriwal, director at research firm KRIS, told Reuters over the telephone.
The two buyers would take over the business on a slump-sale basis with all assets and certain identified liabilities, Vishal Retail said.
The retailer had reported a net loss of Rs194.8 million on net sales of Rs335 crore for the April-June period.
“The valuation, whether it is fair, would be known once the quantum of liability being taken over by these two buyers is quantified or clarified,” Kejriwal added.
Vishal Retail, which ran into difficulties in late 2008 after it failed to raise equity amid the economic downturn, would seek shareholders’ approval to the deal through a postal ballot, the statement said.
At 11:07 a.m., shares of Vishal Retail were trading at Rs56, up 10.13% in a Mumbai market that was up 1.56%.