Cash strapped retail chain Subhiksha Trading Services is reportedly on the block and looking for a buyer or a strategic investor. Investment bankers have approached major retail players like Aditya Birla Retail, Reliance Retail and the Future group for the deal, reports Times of India. The company is in immediate need of Rs 300 crore and its lenders are looking at corporate debt restructuring (CDR). Wether the new investors will be interested in stake or buyout remains to be seen.
The CDR process will come to an end in May this year. The company 1,600 stores will be non-operational till that time as it has not been able to raise money for operational expenses. R Subramanian, Managing Director of Subhiksha, has said the company will not sell equity till the CDR process is completed. He has also said that they are not averse to selling a chunk of the stake to keep the company running.
Subhiksha has a total debt of around Rs 750 crore, which has been raised from foreign and Indian private sectors banks.
ICICI Venture has been able to exit part of its stake in Subhiksha in the past couple of years. It sold a 5% stake to asset management firm ICICI Prudential for Rs 75 crore in June 2007. Then last year it sold a 10% stake to Azim Premji’s private equity firm PremjiInvest for Rs 230 crore. ICICI Venture continues to hold a 15% stake in Subhiksha.