Coffee Day Enterprises (CDEL) on Saturday said it has appointed IDFC Securities as an adviser to identify strategic options and advise it on refinancing existing debt.
The strategic options include divestment of stake in Coffee Day Global and other group companies, CDEL said in a communication to the bourses.
Coffee Day Global owns the Café Coffee Day (CCD) chain. While the company had earlier held preliminary talks with Coca-Cola and ITC, the latest development comes amid reports that both the entities are still keen to acquire a stake in Coffee Day Global. CDEL owns around 90 per cent in Coffee Day Global, which has a network of 1,750 stores in the country. Private equity firm TPG has also reportedly evinced interest.
“The company, in its meeting of the executive committee, has appointed IDFC Securities as the adviser of the company and its subsidiaries for identifying strategic options for 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 the filing.
IDFC Securities would also advise it on refinancing existing debt and raising additional facilities to repay debt in CDEL and its subsidiaries.
Since the death of its founder V.G. Siddhartha, Coffee Day Enterprises has been trying to divest its assets to pare debt.
Recently, CDEL’s board had approved the sale of its Global Village Tech Park in Bangalore to Blackstone to bring down its borrowings. The deal is expected to raise up to Rs 3,000 crore for CDEL.
The company had set up a wholly owned subsidiary, Tanglin, to develop technology parks and special economic zones (SEZs) and offer facilities for information technology and IT-enabled services. In a letter, Siddhartha had mentioned a list of assets and the “tentative” value for each of them. According to the company’s website, Global Village (held by Tanglin) is a 114-acre, IT-focused SEZ in Bangalore.
The CDEL stock ended nearly 5 per cent lower at Rs 60.95 on the BSE on Friday.
Last month, the company had disclosed that the total debt of the Coffee Day group is Rs 4,970 crore of which Coffee Day Global’s debt stood at Rs 1,097 crore.
