Vishal Retail Ltd today posted standalone net profit of Rs 10.47 crore for the fourth quarter ended March 31, 2011, compared to a loss of Rs 128.92 crore in the same period last fiscal, primarily on the back of gain from an extra ordinary item.
The company's standalone net sales for the three months period under review declined 37.99% to Rs 157.88 crore, as against Rs 254.63 crore in the same period last fiscal, it said in a filing to the Bombay Stock Exchange (BSE).
"The extra ordinary items amounting to Rs 76.58 crore is on account of remission/concessions in interest payable granted by secured/unsecured lenders arising out of settlement of loans and terms of corporate debt restructuring," the filing said.
In 2009, Vishal Retail got into financial trouble and piled up debt of around Rs 730 crore. It was forced into a corporate debt restructuring (CDR) programme.
For the year ended March 31, Vishal Retail's net loss reduced 77.42% to Rs 93.63 crore, compared to Rs 414.71 crore net loss in 2009-2010.
The company's net sales fell by 3.69% to Rs 1,064.64 crore in 2010-2011, as against Rs 1,105.45 crore in the prior fiscal.
During the quarter the company had announced sale of its wholesale business to TPG Wholesale Pvt Ltd and retail operations to the Sriram Group company, Airplaza Retail Holdings Pvt Ltd for a total consideration of Rs 70 crore.
"This total business shifting process has taken place by virtue of business transfer agreement and master restructuring agreement and the cut-off date for freezing all the transactions was March 13, 2011," the filing said.
Pursuance to the agreements, the company's books have been trifurcated into three parts wherein all the assets and liabilities pertaining to wholesale and retail division have been transferred to the respective buyers, resulting in net liabilities reduction of Rs 534.50 crore, the filing added.
The company has plans to change its name to 'V2 Retail Ltd' and also enter into real estate business for which it is seeking shareholders' approval.
"In reference to the above slump sale, the company has not entered into an non-compete agreement and is in the process of establishing its new retail chain under the brand name 'V2 Retail' and has entered into lease agreements for eight stores aggregating 1.09 lakh square feet area," the filing said.
The company's scrip closed at Rs 32.25, up 7.14% from the previous close on the BSE.
