Vishal plumps for TPG over Future

R C Agarwal, promoter of beleaguered Vishal Retail, today came out in support of the offer from Texas Pacific Group (TPG) in preference to that from Kishore Biyani’s Future Group.

The lenders, who are finalising a debt restructuring plan for Vishal, are also expected to opt for TPG, as Agarwal has advised. TPG is expected to sweeten its offer when the lenders proceed with discussion on its proposal.

“As of today, R C Agarwal is recommending TPG and Future Group is out of the picture,” a banker told Business Standard. These are the only contenders for the debt-mired retail chain.

Among other things, Future had proposed to convert debt of Rs 175 crore into redeemable preference shares. TPG had proposed to convert the same amount into compulsorily convertible debentures (CCD), which would later translate into equity.

“TPG is ready to match what Future Group has offered if the lenders want,” a bank executive added. Vishal Retail has total debt of Rs 730 crore.

The last lenders’ meeting was on July 28, where it was decided the next one would discuss TPG’s proposal. The lenders had also expressed concern on Future’s bid being likely to delay the matter.

While TPG executives could not be reached for comment, Biyani, Agarwal and a Vishal Retail spokesperson refused to comment.

If TPG’s proposal is approved by the lenders, Vishal Retail is expected to be split into a retail trading firm and a wholesale cash-and-carry company. TPG will acquire stake in the latter, while Indian investors will be required for the retail business.

Banks involved in the debt restructuring are interested in finalising the prolonged process, on since November last year. Those involved include SBI, HSBC, HDFC, ING Vysya, Bank of India and UCO Bank.