TPG to invest in troubled Indian retailer

The global private equity firm has signed an MoU to invest an undisclosed amount in Vishal Retail, which will help the company restructure its debt burden.

TPG Capital has signed a memorandum of understanding (MoU) to invest an undisclosed amount in Indian retailer Vishal Retail, the company has said in a filing with the Bombay Stock Exchange.

The MoU is in accordance with the corporate debt restructuring scheme that has been approved by the company’s lenders. The deal could see TPG invest INR2 billion (€35 million; $43 million) in Vishal Retail, sources told the Business Standard.

TPG declined to comment.

Vishal Retail began operations with one store in the eastern city of Kolkata in 1986. Today, the company has 180 stores in 100 Indian towns and cities. The company is now laden with debt and has been looking for an equity injection to see through a restructuring effort. According to Indian media reports, the company has about INR7.35 billion in debt stemming from cash flow problems it encountered in 2008. 

TPG made a proposal to invest in Vishal Retail in February earlier this year. Vishal Retail said at the time TPG made its proposal under the corporate debt restructuring mechanism and that the proposal had to be approved by all the participating bank lenders. 

In April this year, TPG Growth, the growth investment platform of TPG, invested $26 million in Lilliput Kidswear, an Indian manufacturer and retailer of children’s clothing with more than 250 retail outlets in India and another 30 stores in 10 different countries. 

In January, TPG’s growth investment platform invested £21 million (€24.3 million; $34 million) in Hyderabad-based Greenko, an independent power producer focused on the generation of renewable energy, for a stake of about 12.5 percent in the company.