Coffee Day Holdings to raise Rs 450 cr via pvt equity

Coffee Day Holdings, a Rs 800 crore firm based in Bangalore with interests in coffee exports & retailing, wealth management and hospitality, is looking to raise around Rs 450 crore through the private equity route.

 

The company which is better known for its nation-wide Café Coffee Day coffee chain, is looking to raise this sum to partly replace the $150 million debt which it had raised from Deutsche Bank and Darby Investments, a private equity arm of Franklin Templeton. Coffee Day had raised this debt in two tranches during end of 2007 and early 2008. The company will also be using these funds to expand its chain of coffee bars and also to expand its fledgling hospitality business.

 

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 Bangalore, Mysore and Mangalore. It is also understood that the company has land bank near Pune in Maharashtra

 

Coffee Day Holdings was set up during last year 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 has around 5,000 acres of coffee plantation and is the second largest such firm in India.

 

The company during June 2007 went ahead to raise $125 million debt from Deutsche Group, as part of its $200 million fund raising plan. This move to raise debt was 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. According to sources, this first round of equity infusion into Coffee Day Holdings was raised at a valuation of $550 million.

 

Coffee Day Holdings decision to raise $200 million came 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 shortly from around 800. The chain also has presence in the United States, Vienna and in Pakistan and is planning to dot more global locations.