Reliance set to buy retail chain Super Bazaar

Reliance set to buy retail chain Super Bazaar

Thursday, 10 August , 2006, 10:24

New Delhi: Reliance Industries Ltd, which plans to launch a retail chain, has submitted a Rs 288 crore ($62 million) bid to revive an ailing shopping cooperative, a court panel said. Reliance, the country's top petrochemicals maker that also runs the country's largest refinery, said in June it would invest $5.6 billion in retail that would sell everything from food to clothes to travel services. Indian Labour Cooperative Society along with Indian Potash Ltd well above a Rs 70 crore offered the firm’s bid for the cooperative, Super Bazar, which has several shops in and around Delhi. An evaluation committee constituted by India's Supreme Court was in favour of Reliance because of its financial capacity and development plan for reviving Super Bazar, documents submitted by the panel to the court showed. The panel's recommendations have been forwarded to the Supreme Court, which is expected to take a final decision on it at the next hearing. Reliance has proposed to invest Rs 60 crore in the share capital of Super Bazar, with another Rs 85 crore for working capital. It would spend Rs 143 crore to revamp the chain, and expand to retailing pharmaceuticals, fruit and vegetables, online shopping and institutional sales. It has projected Super Bazar to achieve annual revenue of Rs 1000 crore in two-three years. After posting an accumulated loss of Rs 56.73 crore in 2001/02, the cooperative was shut down. In Pix: Drowned in Rain! Reliance's proposal also aims to settle dues of 10 crores to government agencies, and Rs 25.58 crores to suppliers besides retaining all staff. The Indian government, which has a more than 50 per cent holding in Super Bazar, had invited the bids in May after the Supreme Court asked the government to examine ways to revive the cooperative. The court's intervention came on a petition filed by the employees union against a June 2002 decision by the regulator for cooperatives to wind up Super Bazar. The cooperative has a membership of 40,000 and 2,200 employees. Reliance already runs Sahakari Bhandar chain of retail outlets in Mumbai.

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