Coffee Day sells GV Techpark for Rs 2,700 crore to pare debt

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Updated: September 18, 2019 7:10:23 AM

The firm had recently appointed IDFC Securities as an advisor to identify strategic options, including divestment of its holding in Coffee Day Global and other group companies (other than SICAL Logistics), as well as to advise the firm on refinancing of existing debt and raising additional facilities to repay debt.

Paring Debt, Coffee Day, GV Techpark, share, market news, CDEL, Cafe Coffee DayThe transaction will bring down the group’s debt, which stood at Rs 4,970 crore as on August 17, 2019.

Coffee Day Enterprises (CDEL) announced on Tuesday that it has signed definitive agreements with entities belonging to private equity firm Blackstone and Salarpuria Sattva Group for investment into GV Techpark, a wholly-owned subsidiary of Tanglin Development (TDL), at an enterprise value of Rs 2,700 crore. “The due diligence was completed on Monday night. Blackstone will own 80% of the asset while Salarpuria will own 20%,” said a source aware of the matter.

The transaction will bring down the group’s debt, which stood at Rs 4,970 crore as on August 17, 2019. CDEL indicated that the completion of the transaction is dependent on the transfer of Global Village TechPark asset from TDL to GV Techpark. CDEL also indicated that the transaction will happen in two tranches — first tranche of Rs 2,000 crore followed by a second tranche of Rs 700 crore.

Tuesday’s announcement came post market hours. Shares of CDEL closed the day down 2.09% atRs 72.75 on the BSE. The firm had recently appointed IDFC Securities as an advisor to identify strategic options, including divestment of its holding in Coffee Day Global and other group companies (other than SICAL Logistics), as well as to advise the firm on refinancing of existing debt and raising additional facilities to repay debt.

On July 30, CDEL had communicated to the stock exchanges about the disappearance of its founder Siddhartha. In a letter that was purportedly written by Siddhartha and which was revealed to the stock exchanges by CDEL, the Cafe Coffee Day founder said “I could not take any more pressure from one of the private equity partners forcing me to buy back shares”.

The board eventually appointed SV Ranganath as the interim chairman as well as Nitin Bagmane as the interim chief operating officer of the firm. It also formed an executive committee comprising Ranganath, Bagmane and R Ram Mohan, the CFO, to exercise the powers previously vested with the CEO and the Administrative Committee constituted by the board in 2015. CDEL had asserted that the Executive Committee will explore opportunities to deleverage the Coffee Day Group.

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