"There cannot be smoke without Fire"
For a long time we have been hearing news of Subhiksha not making timely payments to vendors, having empty shelves as vendors have put Subhiksha in lower priority, reports of people looking out trying to jump the sinking ship, and so on. With the employees PF not being paid (Subhiksha has some 5 Crores of PF dues!) and the Satyam story fresh in everyone's eyes this time things are more in the open.
R Subramanian has been in denial mode for several months has now come out in the open. With empty shelves and deserted showrooms, Subhiksha is sinking and needs "Rs 300 crore immediately'' to re-start operations, the company's founder chairman R Subramanian said. "We got into trouble during the second half of last year, when we were unable to tie up funds for our ongoing operations. That slowly started choking and has lead to paralysis of operations completely now,'' he said.
Detailing his outstandings, Subramanian said that his company owed Rs 45 crore to suppliers, Rs 20 crore to employees as salaries and another Rs 24 crore as rentals for various stores. "Our outstandings are only so much, upon getting Rs 300 crore debt, we will then look at restarting operations'' he added.
Subhikhsa is now on the block available for grabs. Not the best time for Subhiksha to be in the market for sale as valutions for all retailers are pretty low. The contenders are Reliance Retail, Aditya Birla Retail, etc.
