The Coffee Day Group has completed the sale of Global Village tech park in Bengaluru to US private equity giant Blackstone, bringing to an end a transaction it first mooted last year.
Karnataka’s registration authorities have issued a letter recording receipt of stamp duty and confirming transfer of ownership.
The group, founded by the late VG Siddhartha, kick-started the sale process in January first week after crossing all major hurdles, including government approvals and a green signal from a clutch of lenders.
“Blackstone will give us the first tranche of about Rs 2000 crore in two to three days. They will release the balance Rs 700 crore after completing other regulatory formalities which may take about four to five months,” a company executive told ET. The statutory approvals include demerger of global village undertaking.
“We will use the entire money to repay debts, and we have not requested for any haircut from the banks,” the person quoted above said. “Our focus now has been to bring down the Group debt to manageable levels from the present at Rs 4700 crore,” he added. Private lender Yes Bank will also get about Rs 100 crore, among the others.
The homegrown café chain operates about 1470 outlets and 59500 vending machines across India, and employs about 20,000 people. A team of professionals led by the Executive Committee of the board is running the coffee business as a `going concern’ amid pressure from lenders and tough market conditions, the executive said. The company, he added, has also made arrangements to settle substantial dues of the planters who supplied green beans to the company.
Global Village is a 90-acre IT-focused tech park, off Mysuru Road in Bengaluru, developed by Tanglin Developments, a subsidiary of the listed Coffee Day Enterprises (CDEL). The transaction will rid Tanglin of its debt load of Rs 1700 crore. Blackstone Group and CDEL did not respond to an email seeking comments on the property registration.
In September, CDEL signed definitive agreements with Blackstone and the Salarpuria Sattva Group to sell its tech park at an enterprise value of Rs 2,700 crore, after the company fell upon hard times following the death of Siddhartha in July.
The Global Village tech park has 4.5 million square feet of built-up area. In a note he left behind, Siddhartha had estimated that the tech-park would earn Rs 250 crore in rentals over the next 12 months. The park has the potential to add another 5 million square feet of built-up space. The group, through Tanglin, also owns Tech Bay, a 21-acre, riverfront property, in the coastal Karnataka city of Mangaluru.
Source: Economic Times