TPG forms team to run Vishal

TPG Capital is putting together a team to run Vishal Retail once its takeover of the firm is complete.

More than a dozen people from human resources, merchandise, finance and other areas have either come on board or are in the process of joining. Late last month, lenders involved in restructuring Vishal Retail’s debt of Rs 730 crores approved a revised offer from TPG to take over the assets of the retail chain. TPG has apparently agreed to bring in Rs 200 crores as the first installment payment towards the working capital of Vishal Retail. The CDR committee will now issue the final letter of approvals to all stakeholders for their final endorsement.

Lenders including State Bank of India, HDFC Bank and ING Vysya Bank are part of the CDR. The economic slowdown that hit the country in late 2008 dealt a crippling blow to Vishal Retail, one of India’s largest discount store operators. Its woes mounted with rising debt and hundreds of crores worth of goods lying unsold in shops and warehouses. Last year, Vishal Retail’s main lenders agreed on a debt recast, following the firm’s inability to service its debts. The assets and liabilities of Vishal are to be transferred to the wholesale company on a slump sale basis and Vishal Retail will cease to exist after the deal and would hold no stake in the new company. Vishal Retail is probably the first listed Indian retailer to sell out in the wake of the global economic meltdown.