TPG eyes stake in Vishal for Rs 250 cr

Global private investment firm TPG has evinced interest in acquiring a majority stake in crisis-hit Vishal Retail, which has gone in for corporate debt restructuring (CDR). Investment banking sources said TPG has made a Rs 250-crore offer for the stake held by Vishal Promoter and Chairman Ram Chandra Agarwal before the CDR cell.

Agarwal and other promoters hold 60.23 per cent stake in the company. The TPG proposal values the beleaguered apparel retailer at Rs 417 crore.

The Mumbai-based CDR cell is holding talks with lenders as part of Vishal Retail’s debt recast. After the joint lender meeting (JLM) remained inconclusive on January 30, the next JLM is scheduled next week.

According to sources, Mumbai-based Wadhawan Group may also join the race to acquire a controlling stake in Vishal Retail, though it has not submitted any proposal as of now.

“It’s one of the top three funds in the world,’’ said Ram Chandra Agarwal in an e-mail response, without naming the fund. “The proposal is under consideration at the CDR committee level.’’

When contacted, Kapil Wadhawan, chairman of Wadhawan Holdings, said, “We are not interested in Vishal Retail.” However, sources in Wadhawan Group said they had held talks with Vishal for a possible acquisition. “The talks have been preliminary and we have not finalised anything. Though we have not submitted any proposal, we may take a call later,’’ the sources said.

The acquisition would help Wadhawan Group to expand its presence in hypermarket space, sources added. The group had earlier deferred its plans to foray into hypermarket space.

The Wadhawan Group, which has interests in real estate, financial services and hospitality, among others, had bought the Sabka Bazaar retail chain in the national capital region (NCR) and S Mart in the South. It had also bought direct to home venture Sangam from Hindustan Unilever in the past. Wadhawan Retail, the retail arm of the group, runs neighbourhood stores.

Though bankers to Vishal Retail were insisting the company rope in a strategic investor, the promoters are resisting the move.

Vishal Retail on Thursday said it was not ruling out diluting Agarwal’s majority stake in the company, but the final decision rested on the outcome of CDR process. “All options are available subject to the final decision of the CDR mechanism,” Ram Chandra Agarwal told agencies on Thursday.

Agarwal said Vishal was hiring retail industry professionals to run the company efficiently. “We are close to finalising the proposal of Planman, a consulting firm, for getting the right professionals for the company. Besides, we are taking services of certain professionals till the time regular employees are hired.”

Vishal Retail went for CDR in November 2009, as it could not repay its short-term debt. Vishal owes Rs 730 crore to banks such as SBI, HDFC, HSBC and UCO Bank and LIC, among others.