In a bid to pare debt, cafe chain operator Coffee Day Enterprises have appointed IDFC Securities as an advisor to identify strategic options and advise it on refinancing of existing debt. The strategic options include divestment of stake in Coffee Day Global and other group firms.
“The company, in its meeting of the executive committee, has appointed IDFC securities as the advisor of the company and its subsidiaries for identifying the strategic options for Coffee Day Enterprises Ltd (CDEL) including divestment of its holding in Coffee Day Global Ltd and any other group company (other than SICAL Logistics Ltd),” Coffee Day Enterprises said in a regulatory filing.
Coffee Day had recently said that its total debt is expected to reduce to around Rs 1,000 crore after adjusting the proceeds from the sale of its Global Village Tech Park in Bengaluru to Blackstone. Total debt of Coffee Day Enterprises as on July 31, 2019 was Rs 3,472 crore.
“The company has already announced the divestment of Global Village Tech Park held by its subsidiary Tanglin Developments Ltd for an aggregate consideration of Rs 2,600-3,000 crore. On receipt of the consideration for the sale of Global Village after payment of required Statutory payments, the debt position of Coffee Day Group will reduce around by Rs 2,400 crore,” the coffee chain operator said.
Meanwhile, the company has appealed to its lenders and creditors to give it sufficient time to honour its repayment obligations and to unlock the true value of the assets. With a sharp fall in share prices following promoter V G Siddhartha’s demise, lenders have been invoking pledged shares in the Coffee Day Enterprises to make good for the losses incurred due to the fall in stock prices.
According to the latest data, finance companies such as Edelweiss and IndusInd Bank have invoked 5.2 per cent of the pledged shares of the promoters between August 1 and 27. Edelweiss has invoked 87.39 lakh shares, followed by Indusind Bank with 23.32 lakh shares that were held by Gonibedu Coffee Estates, one of the holding companies of the promoter which holds 5.24 per cent shares in Coffee Day and its pledged share amount to 78.94 per cent. Siddhartha’s personal holdings, in addition, have also been invoked by institutions such as Kotak Mahindra Bank, Aditya Birla Money and IDBI Bank “in connection with the borrowings of within the group companies of CDEL.”