New Delhi: Discount retailer Vishal Retail is in talks to bring in a strategic investor to infuse capital in the company and is negotiating with lenders to recast its Rs 7.3-billion debt, a top official said.
"It`s realised that fresh infusion of capital is mandatory. The company is looking at all options including talking to strategic/financial investors," Group president Ambeek Khemka said on Wednesday.
Vishal Retail, which runs a chain of 147 stores across the country, ran into difficulty in late 2008 after it failed to raise equity amid an economic downturn which also hit its sales, leaving it with a huge debt burden.
Vishal Retail`s founder Ram Chandra Agarwal holds about 60 percent stake in the company and, Khemka said, to help the company survive, the founder was willing to dilute his stake and bring in a strategic investor.
"Just preliminary talk that we are having," Khemka said of the strategic investor, adding a deal "may or may not" materialise this quarter.
The company`s December quarter store sales fell an annual 5 percent to 3.18 billion rupees as Vishal Retail closed some stores and it should not report a profit for the quarter and also for the next three months as well, Khemka said.