Coffee Day Enterprises Limited is reeling under heavy debt of over Rs 6,000 crore and the news of the Blackstone deal comes days after founder VG Siddhartha’s untimely demise.
Coffee Day group is to sell its Bengaluru Tech Park to asset management firm Blackstone for about Rs 3000 crore. The board directors of Coffee Day Enterprises Limited (CDEL), the parent company of Cafe Coffee Day chain of stores, has finalised the disinvestment of Global Village Tech Park in its subsidiary Tanglin Developments Ltd, which is the real estate venture of the group, the company said in a BSE filing. The selling of 100-acre tech park will likely help the company with the debt burden. The Coffee Day board decided upon the sale of the said asset in its board meeting held on 14 August 2019. The Coffee Day group has entered into a non-binding letter of intent with Blackstone. “The transaction closure is subject to completion of Blackstone’s due diligence, documentation and receipt of requisite regulatory approvals, which is expected in the next 30- 45 days,” CDEL said.
CDEL is reeling under heavy debt of over Rs 6,000 crore and the news of the Blackstone deal comes days after founder VG Siddhartha’s untimely demise. The group had plans to sell the asset earlier as well but the same was deferred as CCD founder shifted attention to the sale of Cafe Coffee Day chain to Coca-Cola, according to various media reports. VG Siddhartha had tried to raise funds by pledging shares of his listed and four unlisted firms, filings with the ministry showed. Siddhartha had both personal and company loans and he had borrowed from a number of entities including organisations, including banks and financial institutions.
In his allegedly last letter, VG Siddhartha had said he was under tremendous pressure from private equity partner, lenders and the IT department and the same had pushed him to take an extreme step. “I am solely responsible for all mistakes. Every financial transaction is my responsibility. My team, auditors and senior management are totally unaware of all my transactions,” he said in the letter.
VG Siddhartha had earlier sold his stake in Mindtree to L&T and had made a profit of close to Rs 2,858 crore. Siddhartha had about 20% stake in Mindtree until 2019. He had made the Mindtree investment over a decade ago.