Ad-for-equity investor BCCL commits $5M again in retailer V2

Four years after exiting Vishal Retail at a loss, media company Bennett, Coleman & Co Ltd (BCCL), that strikes ad-for-equity style investments in consumer facing companies in India, has committed Rs 32.5 crore ($5 million) in Delhi-based retail chain operator V2 Retail Ltd (formerly known as Vishal Retail).

The retail company will issued one convertible warrant at a price of Rs 32.5 crore on a preferential allotment basis. The move received shareholders approval at an extra ordinary general meeting on Monday.

V2 Retail operates a chain of retail stores in India. It offers ready-made apparels, furnishing, food and beverages, among others. The company was founded in 2001 and is based in Delhi.

Cash-rich BCCL, the holding firm for the Times Group, is a publisher of newspapers such as The Times of India and The Economic Times, besides several other print publications and TV channels, such as Times Now, Movies Now, and digital and electronic media properties.

BCCL also runs digital editions of its news properties and competes with the Indian web edition of The Wall Street Journal among others. The Wall Street Journal is part of News Corp, which acquired the parent of this news website in March.

BCCL invests in small and mid-size firms through its arm Brand Capital. It counts several portfolio companies in the retail business, including Future Retail, the company behind hypermarket chain Big Bazaar among other formats.

It had committed fresh investments in the firm after making a huge loss on its previous investment in the firm. It had committed Rs 30 crore in the company in October 2005, one-and-a-half years ahead of its IPO in early 2007. Vishal Retail later went into a tailspin with rising debt and BCCL had exited during 2010-11, losing more than half of its investment value.

Later the retail assets of the firm was sold to a joint venture between PE giant TPG and Shriram Group. Ram Chandra Agarwal-led V2 has been trying to rebuild its retail business under a new brand and position itself as a garments retailer.

As of December 31, 2014, it had accumulated losses of Rs 528 crore.

(Edited by Joby Puthuparampil Johnson)

Leave Your Comment(s)