Not in race to buy Cafe Coffee Day stake: ITC

Coffee Day Enterprises is however believed to be in talks with beverage giant Coca Cola for a possible stake sale.
ITC Ltd (Photo | Reuters)
ITC Ltd (Photo | Reuters)

NEW DELHI: Kolkata-based cigarette-to-hotel conglomerate ITC Group on Wednesday refuted a report that said it is considering to buy a stake in the Coffee Day Enterprises. 

“We write to advise that the company on an ongoing basis receives enquiries from market participants, which are suitably evaluated. One such enquiry was received from an intermediary on Cafe Coffee Day. However, no progress has been made on the matter,” ITC said.  

Coffee Day Enterprises, whose founder and former chairman and managing director V G Siddhartha had committed suicide in July, is however believed to be in talks with beverage giant Coca Cola for a possible stake sale. Promoters of the Coffee Day Group reportedly plan to restart talks with the US-based giant, which has been trying to garner a significant pie in the growing cafe market in India. Analysts say a cafe chain makes business sense for a cola giant as it also gives it a captive market to push its beverages through. 

Similarly, ITC, which has now denied interest, is also believed to be looking to diversify operations as its core cigarette business is marred by high taxation structure. ITC’s efforts at diversifying into food, hotel and paper businesses have already borne fruit as non-cigarette business makes up for a major chunk of its overall revenue. 

Café Coffee Day has about 1,700 outlets and 60,000 vending machines. However, sources in ITC said that CCD does not fit into its business plans as of now. 

Last week, the Coffee Day group said its total debt was Rs 4,970 crore, including Rs 4,796 crore secured loans and Rs 174 crore in unsecured loans.

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