Vishal accepts TPG’s offer

Lenders to debt-ridden Vishal Retail came to a conclusion to accept investment firm

Texas Pacific Group’s (TPG) proposal to acquire the retail outfit, putting Future Group out of the race. The move came after TPG agreed to offer some more money to the lenders. According to one of the secured lenders, the company has been given exclusivity in lieu of improving the deal by Rs 10 to Rs 20 crores.

TPG, which has assets worth $47 billion under management, has also agreed to reduce the moratorium period by a year. The banks have also stated that no other proposal for the debt restructuring of Vishal Retail will be entertained. Vishal Retail had signed a MoU with TPG which was a non-exclusive and non-binding agreement. This had allowed the company to invite other investors as well. TPG’s proposal had received a nod from the CDR cell in March.

The debt restructuring was in the works when Future Group showed interest in the beleaguered company. Lenders discussed both the proposals and decided to go with TPG which has proposed splitting Vishal into a retail trading firm and a wholesale cash-and-carry company. The company will acquire a stake in the latter, while Shriram Transport Finance Company, in which TPG has a stake will takeover the retail business.

Meanwhile, Vishal Retail has announced that net losses for the quarter ended June 30 that has gone down to Rs 19.47 crores as compared to a loss of Rs 90.65 crores in the same quarter last year. Its net sales, however, registered a jump of 26 per cent to Rs 334.63 crores. Its accumulated losses as of March 31, 2010 were Rs 426.90 crores, exceeding its net worth.