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Coffee Day shares end 16-day losing streak, hit 5% upper circuit

Besides Coffee Day, the group's another listed firm, Sical Logistics, is looking to divest its assets to pare debt

BS Reporter  |  Mumbai 

coffee day
People walking past a Coffee Day outlet

Shares of Enterprises on Monday snapped their 16-day losing streak, following reports that the company had re-entered talks with Coca-Cola about selling stake. The statement issued by the group to allay concerns over its debt position also helped improve sentiment. The stock hit its upper limit of 5 per cent to close at Rs 66 on the BSE. It had hit a downward spiral — losing nearly 70 per cent of its market value — following the death of founder-Chairman and Managing Director V G Siddhartha. The scrip had hit lower trading limits in each of the past 16 trading sessions. During this period, the stock fell from Rs 200 to Rs 63, with the firm shedding over Rs 5,000 crore in market value.

At its current price, Coffee Day’s market cap is nearly Rs 1,400 crore.

Chart

Analysts said investors were concerned about the company’s future and debt-servicing capabilities.

At the end of July, the total debt of the group stood at Rs 4,970 crore. The group has already announced plans to sell its 90-acre Global Village Tech Park in Bengaluru. Coffee Day has said the sale will help reduce its debt by Rs 2,400 crore.

Besides Coffee Day, the group’s another listed firm, Sical Logistics, is looking to divest its assets to pare debt. Shares of Sical hit 5 per cent upper limit for a second straight trading session. Sical, too, has lost over 60 per cent in market value following Siddhartha’s demise.

“The company is confident that the ongoing divestments will significantly reduce the debt position of Coffee Day group. The financial position and asset base of the group will be comfortable to service the debt obligations of the entire group fully.

We reiterate that the debt obligations of the Coffee Day group will be honoured. We request all the lenders and creditors to give sufficient time to honour the commitments and to unlock the true potential value of the assets,” the company said in a press release.

First Published: Mon, August 19 2019. 23:23 IST
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