Coffee Day To Sell Its Bengaluru Tech Park To Blackstone For Up To Rs 3,000 Crore
Coffee Day Enterprises Ltd. will sell its Global Village Tech Park in Bengaluru to private equity firm The Blackstone Group Inc. for up to Rs 3,000 crore to cut debt, the operator of Cafe Coffee Day said on Wednesday.
The announcement comes weeks after CCD founder VG Siddhartha was pulled out dead from a river in South Karnataka on July 31. In an unverified letter, which surfaced soon after he went missing on Monday evening, Siddhartha talked about severe financial stress being faced by his group firms, among other issues.
"The board of directors of the company...discussed methods of deleveraging the group... The board discussed and approved the disinvestment of Global Village Tech Park in its subsidiary, Tanglin Developments Ltd., in favour of Blackstone," Coffee Day Enterprises said in a BSE filing.
"The transaction valuation is about Rs 2,600-3,000 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," the company added.
The Coffee Day board also provided in-principal approval for disinvestment in its stepdown subsidiary AlphaGrep Securities Pvt. Ltd in favour of Illuminati Software Pvt. Ltd. for an approximate amount of Rs 28 crore.
"The above-mentioned transactions will significantly help in deleveraging the Coffee Day Group, and ensure smooth operations, while safeguarding the interests of all stakeholders, including investors, lenders, employees and customers," Coffee Day Enterprises said.
Siddhartha seemed to be under severe financial stress before his death, with Coffee Day Enterprises' liabilities doubling to over Rs 5,200 crore and his unlisted ventures in realty and hospitality sectors having similar levels of debt.
On July 31, Coffee Day Enterprises appointed Independent Director SV Ranganath as the interim chairman of the company to replace its founder Siddhartha.
The company’s board, wherein Siddhartha's wife Malavika Hegde is also a director, has also put in place a working structure for the firm.
It also constituted an executive committee comprising Ranganath, Bagmane and CFO R Ram Mohan that will explore opportunities to deleverage the Coffee Day group.