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Coffee Day Enterprises puts Sical Logistics unit on sale to pare debt

This development comes less than a month after CDEL, owner of cafe chain Cafe Coffee Day, sold Global Village Tech Park to Blackstone. The company has been trying to divest its assets to pare its debts since the death of its founder, VG Siddhartha.

twitter-logo BusinessToday.In        Last Updated: September 9, 2019  | 13:09 IST
Coffee Day Enterprises puts Sical Logistics unit on sale to pare debt
Last month, CDEL claimed that the group's total debt stood at Rs 4,970 crore

Coffee Day Enterprises Ltd (CDEL), owner of cafe chain Cafe Coffee Day (CCD), is looking for buyers for its logistics subsidiary Sical Logistics. The development comes less than a month after CDEL sold its real estate property Global Village Tech Park in Bengaluru to private equity major Blackstone for a valuation of around Rs 2,600-3,000 crore.

"CDEL is planning to sell the entire promoter stake and assets of Sical Logistics," sources in the know told Mint, adding that ICICI Securities has been appointed to find a buyer and the potential deal could see the group holding company raise Rs 1,000-1,500 crore. Sical Logistics will be holding its 64th Annual General Meeting on September 12.

Last month, CDEL issued a statement clarifying the debt position of the company along with the breakup of the loans in its major subsidiaries for the first time. The company claimed that the group's total debt stood at Rs 4,970 crore, of which Rs 4,796 crore was secured loans and another Rs 174 crore was unsecured. The biggest share of the group's loans is with the real estate development subsidiary Tanglin Developments Limited. The statement added that the sale of Global Village Tech Park under Tanglin would help reduce the debt position of Coffee Day Group by around Rs 2,400 crore.

According to the daily, a part of the proceeds from this sale will go to CDEL's books towards working capital requirements. On Saturday, CDEL announced the appointment of IDFC Securities as an advisor to identify strategic options and advise it on refinancing of existing debt. Strategic options include "divestment of its holding in Coffee Day Global Ltd and any other group company (other than Sical Logistics Ltd)," the company said in a regulatory filing.

CDEL has been trying to divest its assets to pare its debts since the death of the company's MD and Chairman VG Siddhartha, even as its stock has taken a hammering. CDEL share price has fallen as much as 67 per cent since July 26, 2019, two days prior to Siddhartha's disappearance. His body was found on the banks of the Netravati river in Karnataka on July 31.

With PTI inputs

Also read: Coffee Day Enterprises hits 5% lower circuit as lenders invoke promoters' pledged shares

Also read: ITC denies plan to buy stake in Coffee Day Enterprises

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