RBI admits Vishal Retail debt plan

Nov 21, 2009

Vishal Retail Ltd's proposal for debt recast has been admitted by the corporate debt restructuring cell of Reserve Bank of India, the DNA reported, citing a source close to the development.

"The terms of the debt restructuring will be finalised over the next 60 days," the sources added.

The Delhi-based retailer is saddled with a mounting debt burden of Rs 730 crore.

State Bank of India, HSBC Ltd and HDFC Bank are among the lead bankers for the debt restructuring plan. ING Vysya Bank, UCO Bank and Bank of India are the other lenders to Vishal Retail, the report added.

Group president Ambeek Khemka said, "All the lenders, in the best interests of the company and the stakeholders and the 10,000 families attached to the company, shall take a judicious decision in admitting the company in CDR and, going forward, will do all that is necessary to keep the company running and sustain operations successfully."

The objective of the CDR framework is to ensure a timely and transparent mechanism for restructuring of the corporate debt of companies affected by internal or external factors, outside the purview of Board for Industrial & Financial Reconstruction, Debt Recovery Tribunal and other legal proceedings.

CDR applies only to multiple banking accounts/syndicates/consortium accounts with outstanding exposure of Rs 20 crore and above with the banks and financial institutions, it said.