Coffee Day sells GV Techpark for Rs 2,700 crore to trim debt

Mumbai (Maharashtra) [India], Sep 18 (ANI): Coffee Day Enterprises Ltd (CDEL) has executed definitive agreements with entities belonging to Blackstone Group and the Salarpuria Sattva Group for investment in GV Techparks Private Limited, a wholly-owned subsidiary of group company Tanglin Development Ltd (TDL), at an enterprise value of Rs 2,700 crore.
This transaction will substantially bring down the debt level of the group which was earlier disclosed on August 17 as Rs 4,970 crore, CDEL said in a statement. "The rationale for the sale is to focus on its core business and reduce the debt of Coffee Day Group," it added.
The completion of transaction is dependent on transfer of Global Village TechPark asset from TDL to GV Techpark. The transaction is at an enterprise value of Rs 2,700 crore subject to certain closing adjustments. The closing of the transaction is subject to completion of conditions precedent including receipt of regulatory approvals, CDEL said.
The deal is the first major divestiture by CDEL which has also been in talks to sell its logistics subsidiary Sical and flagship retail business Cafe Coffee Day. The deal is reportedly being done through a special purpose vehicle where Blackstone will own 80 per cent and the remaining will be held by Salarpuria.
The company has been in trouble after its founder V G Siddhartha allegedly took his own life as debt strains began to emerge in his company. Since his death, CDEL has been trying to divest its assets to pare debts.
On July 30, CDEL informed stock exchanges about Siddhartha's disappearance. In a letter that was purportedly written by him, the Cafe Coffee Day founder said: "I could not take any more pressure from one of the private equity partners forcing me to buy back shares." (ANI)