Coffee Day Holdings to raise $125 mn debt from Deutsche Group

Coffee Day Holdings, the holding firm which runs the popular Café Coffee Day chain of coffee bars, is likely to raise $125 million debt from Deutsche Group, as part of its $200 million fund raising plan. This move to raise debt has been precipitated after J P Morgan which was expected to come in with a significant portion of this $200 million limited itself to committing $50 million. Industry sources indicate that Sequoia Capital, an existing investor in this firm is expected to chip in with $25 million.

According to sources, this first round of equity infusion into Coffee Day Holdings is being raised at a valuation of $550 million. The management of Coffee Day Holdings and the investors could not be reached for comments.

Coffee Day Holdings is the holding firm for Amalgamated Bean Coffee Trading Company, the coffee-growing and exporting business, Cafe Coffee Day, Coffee Day Hotels and Resorts, retail broking firm Way2Wealth, Global Technology Ventures (venture capital) and Tanglin Development, the real estate arm which has set up software parks in Mysore and Mangalore. The holding firm is estimated to have a topline of around Rs 900 crore.

This holding firm was recently set up to consolidate promoter's holding in these firms. Coffee Day Holdings is promoted by V G Siddhartha, who started out as a coffee exporter having estates in Chikmagalur, around 250 kms from Bangalore. The company currently has around 5,000 acres of coffee plantation and is the second largest such firm in India.

This decision to raise $200 million comes within months after Café Coffee Day had raised $95 million through a mix of debt and equity from Deutsche Bank and Darby Investments, an investment arm of Franklin Templeton. This was on top of an earlier $20 million funding from Sequoia Capital.

Café Coffee Day is on an expansion spree and is estimated to touch the 1,000 cafes mark by end of the current fiscal. The chain also has presence in the United States, Vienna and in Pakistan and is planning to dot more global locations.