Now, LIC MF sends legal notice to Vishal Retail

After Deutsche Bank, it has also sought to stop asset sale.

Vishal Retail’s large cup of woes stays full. After Deutsche Bank obtained a court order to restrain the retailer from asset sales, another lender — LIC Mutual Fund — has sent a legal notice.

A senior official of LIC MF said as with other institutions, the retailer had defaulted with it. “We have approached regulators and sent a legal notice (to Vishal Retail) to safeguard our interests,” he said.

Vishal has unpaid debt of Rs 740 crore and had plans to sell part of its business to Chennai-based Shriram Group and private equity fund, Texas Pacific Group for Rs 100 crore. The retail trading business was to go to the former and its wholesale division to the latter. Under the deal, the company would get Rs 75 crore in cash and Rs 25 crore in bonds with 7.5 per cent yield. The sale does not include its properties in Kolkata, Dehra Dun, Jabalpur and Hubli.
 

THE DEBT TRAP

* Vishal has unpaid debt of Rs  740 crore and had plans to sell part of its business to Chennai-based Shriram Group and private equity fund, Texas Pacific Group for Rs 100 crore. 

* The retail trading business was to go to the former and its wholesale division to the latter. Under the deal, the company would get Rs 75 crore in cash and Rs 25 crore in bonds with 7.5 per cent yield. 

* Deutsche Bank's exposure to the retailer was to the tune of Rs 10 crore, LIC MF's exposure is almost Rs 100 crore.

* The investment by LIC MF was made through one of its schemes. 

* The assets under management of LIC MF dipped 15 per cent in August to Rs  20,891 crore

Deutsche Bank’s exposure to the retailer was to the tune of Rs 10 crore, LIC MF’s exposure is almost Rs 100 crore.

The investment by LIC MF was made through one of its schemes. However, the official declined to name the scheme and its impact on the net asset value. The assets under management of LIC MF dipped 15 per cent in August to Rs 20,891 crore.

Vishal Retail is going through a corporate debt restructuring (CDR) process to reorganise its debt. The CDR lenders include State Bank of India, HDFC Bank, ING Vysya, UCO and Bank of India. The non-CDR lenders include Barclays, Deutsche and LIC Mutual Fund, among others.

On the Bombay Stock Exchange, the shares of Vishal Retail traded weak in a strong market. The stock closed at Rs 50.05, down one per cent.