Coffee Day Group likely to call for bids to sell majority stake in Sical

The Coffee Day Group, founded by the late VG Siddhartha, is likely to seek bids to sell off its controlling stake in multimodal logistics solutions provider Sical Logistics, people privy to the matter said.

Coffee Day Enterprises (CDEL), which holds about 53 per cent stake in Chennai-based Sical, is also exploring options to get the best value for each of Coffee Day group’s operational businesses that include coffee retailing, financial services and hospitality, in a bid to cut its debt, they told ET.

Separately, the group has also appointed ICICI SecuritiesNSE -0.22 % to work out the modalities of sale of Sical’s assets, and to suggest whether the listed firm should first sell-off individual projects under its arm to cut a bulk of its debt, or raise fresh equity by roping in a strategic partner.

Sical is in the process of seeking shareholder approval to sell, dispose or hive off its multiple business undertakings, the people said. ET had reported in September that Allcargo and TVS Supply Chain Solutions (formerly TVS Logistics) are in initial discussions to acquire the supply chain business of Sical.

The developments come in the wake of efforts by the embattled group to overcome the upheaval caused by the unfortunate demise of its founder Siddhartha in July.

Betting big on logistics business, Siddhartha had acquired a majority stake in Sical in September 2011. He scaled the business which today consists of logistics, terminal business, mining and other divisions including integrated logistics and port handling.

Sical ended 2018-19 with revenues of Rs 1,524 crore, and Ebitda of Rs 173 crore. In the two years to March, the topline had grown about 65 per cent. The firm is sitting on two contracts worth over. Rs 10,000 crore from the West Bengal Power Development Corporation and Damodar Valley Corporation. The first one was awarded in November 2016, while the second one came last year.