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Yet to finalise details of deal with TPG: Vishal Retail

Press Trust of India  |  New Delhi 

Cash strapped Vishal Retail, linked with private equity firm TPG for a possible stake sale, today said it is yet to finalise details of an agreement entered by it with the US-based investment company.

The Board of Directors of the company had last week approved the terms of a Memorandum of Understanding with TPG as part of a debt restructuring programme approved by its lenders.

"At this point we are yet to finalise details and this would happen post the due diligence process," Vishal Retail Chairman and Managing Director Ram Chandra Agarwal said in an emailed response.

He, however, did not provide any timeframe for completion of the process.

TPG has been linked with Vishal Retail for a possible stake purchase in the retailer, although it has not officially admitted it.

Agarwal, however, in the past had said that he is willing to sell stake to the private equity firm in order to revive the cash-strapped retail chain and admitted that Vishal Retail had discussions with TPG in this regard.
Terming the MoU signed with TPG as "non-exclusive and non-binding," he said the agreement was signed after due consideration of directives issued by the Delhi High Court and the Corporate Debt Restructuring (CDR) committee formed by its lenders.

Delhi High Court had recently directed the company not to sell any of its assets to tide over the crisis. Meanwhile, the CDR committee had mooted the idea of stake sale to some private equity player.
The Delhi-based retail chain has been undergoing a debt restructuring exercise since last November to make it eligible for fresh infusion of equity and to streamline its operations. Faced with a huge debt burden of Rs 735 crore, Vishal Retail had last year halted its expansion plans and closed down some of its outlets.
Agarwal, however, did not give any comments on queries directed at the progress of the CDR process.
Vishal Retail currently operates around 170 supermarkets across the country.

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First Published: Sun, June 27 2010. 14:52 IST