Subhiksha shareholder seeks compromise with creditors

Beleaguered retail chain Subhiksha today said that one of its shareholders -- Cash and Carry Wholesale Traders -- has filed a petition before the Madras High Court seeking a compromise between the company and its creditors.

It also added that the company hopes to resume operations in three-four months and its management is working with lenders on restructuring the firm.

The petition has been filed under Section 391 of the Companies Act.

"We have been informed and notified that Cash and Carry Wholesale Traders, the promoter of Blue Green Construction and Investment, into which we are merging has filed a Section 391 petition before the High Court," Subhiksha Trading Services Managing Director R Subramanian said in statement.

 

Section 391 of the Companies Act provides that the court may order a meeting of the company and its creditors to arrive at a consensus on any issue. He, however, refused to give details "as the matter is before the Courts".

He was responding to reports that Subhiksha has itself filed a petition under Section 391 to arrive at a compromise with its stakeholders and creditors at a time when its corporate debt restructuring (CDR) exercise has not been culminated though the July 31 deadline is over.

"Subhiksha has not filed any Section 391 petition before the Madras High Court... The said petition has been filed by Cash and Carry Wholesale in their capacity as a shareholder of our company in compliance with the relevant law and rules," Subramanian said.

Subhiksha merged with Cash and Carry Wholesale Traders' subsidiary Blue Green Construction and Investment in 2008 and the merger issue is pending before the Madras High Court.

While maintaining silence over the CDR issue and the July 31 deadline for completing the process, Subramanian said that the company hopes to resume operations in three-four months.

"The company and its management are working in close coordination with most of the banks on the restructuring... Based on the discussions with the various stakeholders, the company is confident of resuming business operations within the next three-four months," he added.

The retail chain's operations have been at a standstill since early this year due to a liquidity crunch, which has forced it to close down all its 1,600 outlets in the country.

The company is undergoing a CDR process to make it eligible for a fresh equity infusion and the process was supposed to have been over by July 31.