Yes Bank objects to Blackstone's buyout of Coffee Day's tech park

Beleaguered Coffee Day Enterprises Ltd.’s sale of its technology park to Blackstone Group Inc. is stalled as one of its creditors hasn’t approved the deal, people with the knowledge of the matter said.

Yes Bank Ltd. hasn’t issued the so-called no objection certificate as it’s seeking assurances on repayments of other loans taken by Coffee Day, said the people, asking not to be identified as the information isn’t public. All other creditors have approved the transaction, the people said.

Shares of Coffee Day extended decline to as much as 14.5% in Mumbai, which is the biggest drop since July 31.

Coffee Day, which runs India’s largest coffee chain, has been trying to sell its assets to repay its debt after the unexpected death of its founder billionaire V.G. Siddhartha. On Aug. 14, the company announced that it has entered into a non-binding letter of intent to sell Global Village Tech Park to Blackstone in a deal valued at 26 billion rupees ($366 million) to 30 billion rupees.

Tanglin Developments Ltd., a unit of Coffee Day that controls Global Village Tech Park in Bangalore, owes Yes Bank about 1 billion rupees, according to the people. In addition, Coffee Day also owes the lender about 14 billion rupees, the people said.

Yes Bank could eventually approve the transaction, one of the people said. Representatives for Blackstone, Coffee Day and Yes Bank declined to comment.

Coffee Day's Sical Logistics seeks shareholder nod to sell biz undertakings

Sical Logistics, a Coffee Day Group company, has sought shareholders' nod to sell, dispose off or hive off multiple business undertakings to pare debt. In order to pay off its debts and to run major businesses of the company in a smooth manner, the board of the company in August directed the management to explore opportunities to deleverage the company and its subsidiaries.

In a notice sent to its shareholders, the company said that the resolution "to sell, dispose off or hive off the business undertakings, are proposed to be passed through a postal ballot and remote electronic voting by the shareholders of the company." To find the suitable buyers, the proposal has to be approved by the company's shareholders, Sical Logistics said in a regulatory filing to BSE.

The company is looking to sell its various business units as well the shareholdings held in the subsidiaries either as such or consolidating by purchasing the shares held by any other investors in the subsidiaries. "Such sale shall be for a price which shall be based on valuation and the same may be either through strategic sale or slump sale as would be found advantageous to the company whereby the stakeholders interests would be taken sufficient care of," the company said.

Such proceeds would be utilised to pay off the debts, it said adding that the company is in the process of identifying suitable buyers.

Sical Logistics is an integrated logistics solution provider for bulk and containerised cargo in India. Coffee Day Group acquired Sical in September, 2011, as per the company's website.

Coffee Day Q1 net jumps to Rs 1,509 cr on one-off gain from Mindtree sale

Coffee Day Enterprises (CDEL) reported a net profit of Rs 1,509 crore in the first quarter of this financial year as it booked a one-time gain of Rs 1,659 crore from the sale of Mindtree stake.

Net profit stood at Rs 17 crore in the first quarter of last financial year, while it was at Rs 26 crore in Q4 of FY19. Excluding the gain, CDEL, however, reported a loss of Rs 156.6 crore for the April-June period.

The Bengaluru-headquartered firm’s revenues stood at Rs 942 crore, a fall of 2 per cent on a year-on-year basis. Sequentially, revenues declined 29 per cent. After the demise of CDEL group chairman V G Siddhartha, the conglomerate — with business interests in coffee to tech park — had taken approval to delay its Q1 result announcement by 45 days.

CDEL’s flagship coffee retailing arm, Coffee Day Global posted a loss of Rs 60.8 crore in Q1 of FY20 as the retailer closed down 280 cafe’s, resulting in an outgo of Rs 19 crore. “Same-store sales growth was down 4 per cent, while average sales per day was holding firm at Rs 15,445 in a challenging environment,” the company said.

The firm said its consolidated financials depend on the investigation report that is likely to come out in few weeks.

As part of the company’s deleveraging efforts, the board on Wednesday authorised Siddhartha’s wife Malavika Hegde (who is on CDEL board) or CFO of Coffee Day Global Jayaraj Hobli to rope in agencies for conducting due diligence to divest stake in CDGL. The company had already appointed IDFC Securities in September this year to explore stake sale possibilities in its coffee retailing unit.

KKR India CEO Sanjay Nayar quits board

Coffee Day Enterprises said private equity firm KKR India’s Chief Executive Sanjay Nayar had resigned from the board after nearly a nine-year stint. The private equity firm owns 6.07 per cent stake in Coffee Day, while NLS Mauritius holds the maximum 10.61 per cent stake. With the resignation of Nayar, the board strength has now come down to three.

Promoters' holding in Coffee Day dips 28% to 25.35% as of Sept quarter

Promoters' holding in Coffee Day Enterprises (CDEL) has dipped 28 per cent to 25.35 per cent as of September quarter. Experts say some lenders may have invoked shares pledged by the company's promoters in the second quarter, leading to such dilution of holdings. According to regulatory filings, the promoter and promoter group of CDEL include the founding chairman of Coffee Day group V G Siddhartha, Malavika Hegde, Devadarshini Info Technologies, Coffee Day Consolidations and Sivan Securities. The firm said the total percentage of shares pledged by promoters increased to 79.94 per cent as of September compared to 75.7 per cent reported in the June quarter.

"Lenders to the promoters have invoked the shares pledged, which has led to such a big dip in the promoters' holdings," said Shriram Subramanian, founder of corporate governance advisory firm InGovern.

During the second quarter, CDEL disclosed to the exchanges on multiple occasions about shares being liquidated by the lenders to recover the amount owed by the promoter group. However, sources in the know said that unless the promoters take immediate measures to free up pledged shares, they may see further dip in their holding.

After the demise of Siddhartha, market participants and lenders were worried over the high debt level of the group and its ability to service its obligations.

However, the company has taken several deleveraging measures to reduce its overall debt level. As part of this initiative, CDEL has entered into a definitive agreement with Blackstone and Salarpuria Sattva Group last month to sell the 'Global Village Tech Park' for Rs 2,700 crore. Similarly, the company had roped in IDFC Securities as a consultant to advise the company on refinancing existing debt and repaying of current debt.

Another group company, Sical Logistics has appointed ICICI Securities for finding out various deleveraging options. Apart from all these measures, CDEL has also appealed its creditors and lenders to provide sufficient time for honouring its repayment obligations. The debt level of the group stood at Rs 4,970 crore at the end of July, 2019.

Coffee Day inks deal with Blackstone to sell Global Village for Rs 2,700 cr

Coffee Day Enterprises on Tuesday said it has signed definitive agreements with private equity major Blackstone and Salarpuria Sattva Group for sale of Global Village Tech Park at an enterprising value of Rs 2,700 crore.

The company board had recently approved the sale of prime real estate property GV Tech Park as part of efforts to raise funds for paring the debt.

The company has executed definitive agreements with entities belonging to Blackstone Group and the Salarpuria Sattva Group for investment in GV Techparks Private Ltd, a wholly-owned subsidiary of Tanglin Development Limited, Coffee Day Enterprises said in a regulatory filing.

"The transaction is at an enterprise value of Rs 2,700 crore subject to certain closing adjustments," the company said.

The completion of the transaction is dependent on the transfer of Global Village TechPark asset from TDL to GV Techpark Pvt Ltd, it added.

The closing of the transaction is subject to receipt of regulatory approvals, it added.

"This transaction will substantially bring down the debt level of the group which was earlier disclosed on August 17, 2019 as Rs 4,970 crore," Coffee Day Enterprises said.

The company has been in trouble after its founder VG Siddhartha took his own life as debt strains began to emerge in his company. Since his death, Coffee Day Enterprises has been trying to divest its assets to pare debts.

Coffee Day Enterprises shares on Tuesday ended 2.09 per cent down at Rs 72.75 apiece at BSE.