Cash-strapped retail chain Subhiksha today said its corporate debt restructuring (CDR) would have to end by July this year “at any rate”, although it expected the process to be completed before April-end.
“CDR is a time-bound process of a maximum of 180 days. It has to end at any rate by July 2009,” said R Subramanian, managing director, Subhiksha Trading Services Ltd.
He was replying to a query on how much more time would be required for the CDR to be considered as officially over.
Subramanian, however, refused to state clearly whether the company would use the time available till July.
“We are merely stating the position that it can’t extend beyond 180 days. We are not suggesting that it will get delayed beyond the old estimate (of April-end). We believe the restructuring will be agreed before end-April,” he said.
“As we are running costs on a daily basis, we would like to take the least time. The completion of the CDR means completion of all work, including documentation,” said Subramanian. The company had initiated the CDR in January-February with the aim of becoming eligible for re-starting the business and raising liquidity to the tune of Rs 300 crore.
Subhiksha had a nationwide network of around 1,600 stores when operations came to a standstill in January this year due to liquidity crunch.
Subramanian said the company now hoped to make around 75 per cent of its stores operational after the CDR.
The company, in early March, had declared its intention to close down 350-400 stores permanently due to low sales and high rentals.
He said the first task after the CDR was to “restart the business and get the business back on track.”
Asked about the prospects for the Rs 300 crore liquidity injection, Subramanian said, “That money will be tied up at the time of the formal closure of the CDR process.”
He, however, did not disclose the identity of the lender institutions who are likely to fund Subhiksha’s revival.
Source: Business Standard