The lenders to Vishal Retail have not yet reached a decision on the differing proposals of Texas Pacific Group and Future Group to take over the business of the debt-ridden company. The three parties and the Vishal Retail management had met on Wednesday to discuss the new proposal.
Some lenders have expressed concerns over the Future group’s bid. The retail giant would go ahead only after the completion of requisite due diligence to its satisfaction, which would take a month, a senior banker said. “This will further delay the process of corporate debt restructuring (CDR). TPG was much nearer to closing the deal,” he added.
Future Group had proposed converting Rs 175 crore of the total debt into redeemable preference shares, with redemption at the end of 10 years from the date of issue. TPG, on the other hand, had proposed to convert the same amount into Compulsorily Convertible Debentures. “The second option is seen as more beneficial by some lenders in case TPG can turn the company around and trade at a premium whenever it is listed,” the banker said.
While a formal date for the next lenders’ meeting has not been decided, banks will discuss among themselves.
The CDR cell had already approved TPG’s proposal to invest in Vishal. The company had signed an agreement with TPG which was non-exclusive and non-binding. This means new investors can still come in. Earlier in an interview to Business Standard, R C Agarwal had said he was also talking with other investors who had shown interest in his company.
