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US private equity fund may take over Vishal Retail

US private equity fund may take over Vishal Retail

New Delhi: US-based private equity firm TPG Capital is set to take over debt-laden Indian retailer Vishal Retail Ltd, a report said.

An announcement is likely on 26 March, when Vishal’s lenders—who are working on corporate debt restructuring (CDR) for the firm—meet to formally give TPG the approval to go ahead with the takeover, Dow Jones Newswires reported, citing an unnamed person with direct knowledge of the deal.

“The lead banks, through the CDR process, have agreed to the company’s proposal to induct a new promoter, namely TPG," the person told Dow Jones Newswires.

Late last year, Vishal Retail became the second Indian retailer after Subhiksha Trading Services Ltd to opt for CDR after an economic downturn hit the retailers hard amid slowing consumer spending and rising debt.

On Monday, Vishal Retail’s managing director Ram Chandra Agarwal told television channel CNBC-TV18 that the company would sell some of its land holdings to pay the banks about Rs85 crore. This, he said, would reduce its total debt to about Rs650 crore.

Agarwal said Vishal Retail planned to nearly halve the remaining debt by issuing to the banks Rs300 crore worth of coupons, which could be converted into equity in future.

Agarwal also told the channel the retailer would require about Rs200 crore to buy fresh merchandise, which would help generate monthly sales of Rs150-200 crore.

TPG Capital India managing director Puneet Bhatia refused to speak on the matter, PTI reported.

Vishal Retail has around 170 large format stores, including 149 company-owned outlets. A year ago, it had to shelve its expansion plans due to mounting debt.


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