A fortnight after the alleged suicide of Cafe Coffee Day founder VG Siddhartha, the coffeeshop brand's holding company Coffee Day Enterprises Ltd. has decided to sell Global Village Tech Park held by Coffee Day subsidiary Tanglin Developments Ltd. to US-based buyout giant Blackstone Group Llp for a price of ₹2600-3,000 crore, according to an exchange filing.
On 9 August Mint first reported that the CDEL board decided to sell the group’s 90-acre Global Village Tech Park in Bengaluru to reduce CDEL’s debt burden and Blackstone Group was one of the top contenders to buy the Global Village Tech Park.
"Blackstone has in the past week resumed talks to buy Tanglin Developments, said two separate people directly familiar with the deal on the condition of anonymity" said the Mint report.
Following a board meeting, on Thursday, CDEL said, "the transaction valuation is about ₹2600 crore-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."
"The board takes the opportunity to thank Blackstone for their professional and transparent approach and quick turnaround time displayed under adverse market conditions," said CDEL in its filing.
Further, the board of CDEL has also provided it's in principal approval for 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, according to the exchange filing.
The company said these two 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.
Mint first reported on on 1 August that CDEL was planning to selectively sell assets of the Siddhartha-founded company to pare debt incurred by the group’s 52 units.
As on 31 March, CDEL— whose main subsidiaries include Coffee Day Global Ltd (coffee business), Sical Logistics Ltd (integrated logistics), Tanglin Developments Ltd (realty), Way2Wealth (financial services) and Coffee Day Hotels and Resorts Ltd (hospitality)—had debt obligations of at least ₹7,653 crore.
Consolidated borrowings of all CDEL subsidiaries together (bank loans and NCDs) worked out to ₹6,547.38 crore as on 31 March, of which short-term debt obligations were at ₹1,106 crore. On a standalone basis, CDEL’s borrowings were only around ₹350 crore, while its subsidiary Coffee Day Global alone had debt obligations of ₹879.67 crore as on 31 March, according to the balance sheet filed by the company. CDEL’s total assets were worth around ₹11,259 crore.