Coffee Day Enterprises Ltd (CDEL), the operator of coffee retail chain Cafe Coffee Day, on Wednesday announced to sell the group's 90-acre technology park in Bengaluru to pare its debt, which could fetch up to Rs 3,000 crore.
CDEL, the holding company of Coffee Day group firms, said in a stock-exchange filing that it has entered into a non-binding agreement with New York-based private equity giant Blackstone to disinvest its Global Village Tech Park in Bengaluru.
CDEL, the holding company of Coffee Day group firms, took this decision to reduce its debt burden. As of March 31, 2019, Coffee Day Enterprises reported a debt of Rs 6,547 crore. The development came a little over a week after the death of Cafe Coffee Day (CCD) founder V.G. Siddhartha.
"The board of directors today approved the disinvestment of Global Village Tech Park in its subsidiary, Tanglin Developments Ltd, in favour of Blackstone," CDEL said in a filing to the Bombay Stock Exchange.
Earlier this month, CDEL board had said that it would sell the assets of Coffee Day group to pare its debt. The CDEL board had constituted an executive committee to explore the opportunities to deleverage Coffee Day group. The executive committee in charge of deleveraging Coffee Day group consists of Non-Executive Independent Director SV Ranganath, Chief Operating Officer Nitin Bagmane and Chief Financial Officer R Ram Mohan.
The transaction valuation is about Rs 2,600-3,000 crore, the company said in the exchange filing. "The transaction valuation is about Rs 2600 crore-Rs 3000 crore and the company has entered into a non-binding letter of intent."
"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's board also approved disinvestment in its step-down subsidiary, AlphaGrep Securities Pvt. Ltd in favour of Illuminati Software Pvt. Ltd. for an approximate amount of Rs 28 crore.
The company said that the above transactions will help in deleveraging the Coffee Day group, and ensure smooth operations while safeguarding the interests of all stakeholders, including investors, lenders, employees and customers.
Meanwhile, shares of Coffee Day Enterprises closed trade at Rs 66.25 apiece, down 4.95 per cent, on the BSE.
Edited by Chitranjan Kumar