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Premji's 
40 Crore brews new life in Subhiksha
By siliconindia
|
Friday, 13 February 2009, 17:50 IST |
3 Comments
Bangalore: Cash-strapped Subhiksha is brewed with a new life as Premji Invest forked out 
40 crore to restructure the debts of the retail chain. "Premji Invest is seriously looking at getting the company's corporate debt restructuring (CDR) package approved by the 13 banks that work with Subhiksha," a source told The Economic Times.
The investment motive of Premji Invest is yet to be ascertained and the company has declined to comment on the speculations. Earlier, Premji had advanced 230 crore to acquire 10 percent stake in Subhiksha, through a partial buyout of ICICI Venture's holdings. Currently, the founder R Subramanian holds 59 percent stake in Subhiksha, ICICI Venture has 23 percent, Premji Invest has 10 percent and about 5 percent is with ICICI Mutual Fund.
The investment will help the retail chain to restructure its financial turbulences, which is scouting for immediate funds to pay salaries to 4,600 employees on the company rolls. It is understood that 4,000 employees opted for leave without pay for six months starting from December 1. Half of Subhiksha's 1,500 stores reportedly downed their shutters owing to a huge cash crunch. Meanwhile, sources close to Premji Invest said the fund would wait for CDR before deciding on the future course of action. "Any decision will have to wait till the CDR mechanism becomes operational. We have no board seat and management rights at the moment," he said.
40 crore to restructure the debts of the retail chain. "Premji Invest is seriously looking at getting the company's corporate debt restructuring (CDR) package approved by the 13 banks that work with Subhiksha," a source told The Economic Times.
The investment motive of Premji Invest is yet to be ascertained and the company has declined to comment on the speculations. Earlier, Premji had advanced 230 crore to acquire 10 percent stake in Subhiksha, through a partial buyout of ICICI Venture's holdings. Currently, the founder R Subramanian holds 59 percent stake in Subhiksha, ICICI Venture has 23 percent, Premji Invest has 10 percent and about 5 percent is with ICICI Mutual Fund.
The investment will help the retail chain to restructure its financial turbulences, which is scouting for immediate funds to pay salaries to 4,600 employees on the company rolls. It is understood that 4,000 employees opted for leave without pay for six months starting from December 1. Half of Subhiksha's 1,500 stores reportedly downed their shutters owing to a huge cash crunch. Meanwhile, sources close to Premji Invest said the fund would wait for CDR before deciding on the future course of action. "Any decision will have to wait till the CDR mechanism becomes operational. We have no board seat and management rights at the moment," he said.