Two private equity funds are in talks with the Coffee Day group to explore investment opportunities in the beleaguered cafe chain after the company cleared a third of its debts to banks and other lenders recently.
Singapore-based SSG Capital Management and Affirma Capital (formerly Standard Chartered PE) are leading talks for possible investments in Coffee Day Global (CDGL), a subsidiary of the listed entity Coffee Day Enterprises, according to sources privy to the development. CDGL manages cafe, vending machines and other retail business. Affirma, KKR and NSR are stakeholders in the listed company.
Top executives of SSG and Affirma have had a couple of rounds of video-conferencing with the top management of Coffee Day group, including Malavika Hegde, wife of group founder, the late VG Siddhartha. Talks, however, have been inconclusive.
The investments will be either structured credit or pure equity infusion, which needs to be decided, sources said.
Coffee Day, SSG and Affirma did not respond to emails seeking comments.
The funds are learnt to have proposed to infuse working capital, restart operations in full swing, rebrand the coffee retail business and run it like it was before, persons briefed on the subject told ET.
SSG, sources said, has offered to invest only on condition that other existing PE funds also participate, though with varying degrees. Its executives are said to have engaged the three PE investors in talks, and any fresh infusion depends on the four players reaching an agreement.
Source: Economic Times