INDIA – Coffee Day Enterprises Ltd (CDEL), the holding company of Coffee Day Group has unveiled plans of selling its entire promoter stake in Sical Logistics as the company seeks to refinance its existing debt.
The Indian cafe chain operator has hence appointed IDFC securities as the advisor of company and its subsidiaries for identifying various strategic options.
IDFC Securities would also advise on refinancing of existing debt and raising additional facilities to repay debt in CDEL and its subsidiaries. The company expects to raise ₹1,000-1,500 crore ($139.4m- $209m).
The company said that is also considering divesting its holding in Coffee Day Global Ltd and any other group company.
Founded by V.G. Siddhartha, Cafe Coffee Day chain of coffee houses has around 1,700 outlets across India operated by CDEL.
CDEL also owns Tanglin Developments Ltd, Way2Wealth, and Coffee Day Hotels and Resorts Ltd in addition to Sical Logistics Ltd (an integrated logistics company) and Coffee Day Global Ltd.
The company has been struggling with debt obligations of at least ₹7,653 crore, (US$1.067bn) as on 31 March, following the exit of Siddhartha and two CDEL subsidiaries sold form Mindtree Ltd.
The trio sold their entire stake in Mindtree Ltd to Larsen and Toubro Ltd for ₹3,200 crore (US$446.21m) and used a part of the money to repay debt.
As part of CDEL’s efforts of refinancing its debt, it has also agreed to sell the Global Village Technology Park in Bengaluru, India to to New York-based private equity giant Blackstone Group.
The sale of the 90-acre tech park was valued at between ₹2,800 and 3,000 crore ($390.43m to $418.32). The company intends to use the proceeds to further repay debts and enable the company meet its working capital requirements.
Repayments between March and June-end have too helped CDEL reduce loan obligations at a consolidated level.
According to a LiveMint report, the asset sale will help CDEL pare its debt obligations from ₹4,400 ($613.54m) crore to ₹2,400 crore ($334.66m), which will be further lowered via the sale of some of CDEL’s other assets over the next two months.