Coffee Day expects YES Bank nod to Global Tech Park deal in 10 days

Subsidiary Sical Logistics is eyeing a pact with institutions soon to raise debt capital

Coffee Day Enterprises (CDEL) sees its working capital position improving by the second week of January. 
 

This is because the company expects proceeds of the ‘Global Tech Park’ sale to go through during this period apart from seeing some debt capital flow from financial institutions.
 

Sources privy to the development said though YES Bank is yet to give approval to the (Global Tech Park) deal, it is likely to come in the next 10 days.
 

“In the last five months, after the tragic demise of V G Siddhartha, the company has not received even a paisa from banks. If Blackstone (deal) comes through, which the company feels will be done in the second week of January, things will improve,” said a person familiar with the development. 
 

“The company will pay (to its creditors) the last paisa,” the person added.
 

In September, CDEL decided to sell the Global Village Tech Park to private equity major Blackstone and realty firm Salarpuria Sattva Group for Rs 2,700 crore.
 

A person familiar with the development also said that despite working capital crunch, all the cafes and vending machines are operating normally without any disruption. 
 

However, some of its subsidiaries have not been able to service their debt owing to cash flow mismatches.
 

Sical Logistics, one of the listed subsidiaries of CDEL, on Thursday informed exchanges that payment of semi-annual interest of Rs 5.5 crore on non-convertible debentures issued by the firm would be delayed. 
 

In the September quarter also, the firm had not paid Rs 10.72 crore interest to creditors.
 

“While talk of divestment is going on, Sical is simultaneously trying to raise some debt, which will ease the working capital crunch substantially,” said another person.
 

Meanwhile, CDEL expects the investigation report on the purported letter, allegedly written by founder of the group late VG Siddhartha, to be presented to the board next month.
 

In August, the group had roped in former DIG of the Central Bureau of Investigation (CBI) Ashok Kumar Malhotra, along with law firm Agastya Legal LLP, to investigate contents of the letter apart from giving the mandate to scrutinise its books of accounts.
 

By the end of July, the group’s aggregate debt stood at Rs 4,970 crore, of which Tanglin Developments’ liabilities stood at Rs 1,622 crore.
 

Its flagship coffee retailing arm Coffee Day Global’s total debt was at Rs 1,097 crore.
 

According to regulatory filings, promoter holding in CDEL, comprising shares of Coffee Day group founding chairman late VG Siddhartha, his wife Malavika Hegde, Devadarshini Info Technologies, Coffee Day Consolidations and Sivan Securities, has seen a sharp fall of around 28 per cent to touch 25.35-per cent at the end of September quarter. 
 

This was majorly due to liquidation of pledged shares by lenders during this quarter.
 

Overseas corporate bodies such as NLS Mauritius LLC held the maximum 10.61 per cent stake in the company followed by KKR Mauritius PE Investments II with 6.07 per cent, during this period.
 

Similarly, Marina West (Singapore) and Marina III (Singapore) were the remaining overseas corporate investors with 4.63 per cent and 1.04 per cent stake, respectively.        

MONEY MATTERS

Coffee Day Enterprises expects approval to its Global Village Tech Park deal from YES Bank in 10 days

CDEL’s subsidiary Sical Logistics in talks with lenders to raise debt capital

Coffee Day Group has not received any funding support from banks in the last five months

All its businesses, including cafes and vending machines, are operating normally despite working capital crunch