Indiabulls Real Estate has written off the entire investment in its retail arm, which it took over from the Piramals during the retail boom in December 2007.
The company had paid Rs 42 crore to take over 64% of Indiabulls Retail Services (earlier known as Piramyd Retail or PRL). The company had also taken over liabilities worth Rs 120 crore.
In its recent QIP filings with the stock exchanges, Indiabulls Real Estate said it may have to write off its investments in the shares of PRL due to its continued losses. The company said that it may not be able to find a suitable buyer at acceptable terms for its retail arm.
Indiabulls Real Estate owns the retail arm through its wholly-owned subsidiary Indiabulls Wholesale Services.
Indiabulls’ retail foray met the same fate as other players. The company had to close down 38 of its 42 stores. It has blamed wrong store locations and inefficient supply chain management for its losses. The retail arm made a loss of Rs 70 crore for the nine months ended December 2008.
Times of India