Vishal Retail to commence debt restructuring process soon

Reeling under a huge debt of around Rs 730 crore, Vishal Retail has approached its lenders to undertake a debt restructuring process to revive the company.

The company's lenders are expected to undertake the corporate debt restructuring (CDR) process soon to streamline the debt repayment.

"The company's lenders, who number over a dozen, would soon start the process of CDR. The main purpose of the exercise is to streamline repayment of the debt," an industry source said.

"A final decision on commencement of the CDR process will be taken soon," the source added.

CDR is a process under which a company seeks to restructure its outstanding loans by either seeking additional time frame for repayment or decreasing the rate of interest on the outstanding debts.

The move is intended to help Vishal, which is among the leading retail players in the country, to get back in shape and avoid further decline.

When contacted a company official declined to comment.

Vishal Retail had announced plans to renegotiate part of its debts with lenders and shut down around 10 of its outlets to cut cost in July.

The retail chain's business has been under pressure for the last few months and for the first quarter ended June 30, 2009, it had reported a sharp decline in total income to Rs 265.37 crore.