Q&A:Ram Chandra Agarwal, Chairman, Vishal Retail

Debt-ridden Vishal Retail has been struggling with lenders for quite some time. Ram Chandra Agarwal, chairman, is confident its loan restructuring will be through within two months. He tells Ruchika Chitravanshi the lenders are happy with his company and various investors are also showing interest. Edited excerpts:

How are things at Vishal Retail now?
Very good. We have the best stock turnover ratio in the industry. With an inventory size of around Rs 200 crore, we had sales of Rs 130 crore. In this quarter, we will have sales of Rs 350-375 crore and for the whole year, Rs 1,500-1,800 crore. We are in Ebitda (earnings before interest, taxes, depreciation and amortisation) profit. Last year, we had so much losses. Now we are improving our interest burden.

Isn't the ratio good because of the inventory write-offs?
That happened last year. Whatever inventory we now have is correct inventory. It is sale-able in the market. There won't be any major writedown now.

What is taking the corporate debt restructuring (CDR) package so long to be implemented, even after it has got formal approval?
There are a lot of stakeholders and we are working towards getting all of them on the same platform. In a month or two, CDR should be through. There are some issues. We are progressing on a positive note.

So, Texas Pacific Group (TPG) would be the investor?
It is not as if we are working for just one investor. We have options, which I can't share at the moment. The company is improving, and so, investors are showing interest.

The non-CDR lenders are taking their own measures for debt recovery. How are you dealing with that?
We are trying to have a dialogue with them. If you are talking about DBS, we are thinking of approaching the court to vacate the order. If the company does well, then only will their interests also be protected. Everything will be resolved. We are in talks with them, their issue will be taken care of.

How would you do that?
I cannot say that right now. I have been saying that everyone's interest will be taken care of and that's why it is taking so much time.

Would you prefer to get an out of court settlement with DBS ?
No one wants to kill the company. Out of court is the most beneficial settlement for everyone.

There are reports of the Registrar of Companies looking into the books of Vishal Retail.
No such move has taken place in my knowledge. There is a lot of negative publicity involved. We need some constructive media. The company is doing well for the past 15 months without any fund infusion. We recruited 125 MBAs. We want to reach a position where we can pay off the debt, with interest to all the lenders, without any outside help.

You had said the company does a statutory audit every quarter. Have you shared any audit report with the CDR cell?
No, why do I have to give it to them? They don't need a stock audit report. They have got what they wanted. They are happy with the company. In all likelihood, in two months the CDR process will be through. The CDR cell doesn't need the audit.

Will there be a personal guarantee against the debt repayment given to the lenders?
It is not in the norms of the CDR to give a personal guarantee. And, it won't stop the banks from extending the CDR. Banks will pass the CDR when they see a good investor is coming in the company. There are deliberations going on.