Coffee Day Enterprises has entered into a deal with private equity firm Blackstone to sell its Bengaluru-based tech park for Rs 2,600-3,000 crore. The deal comes within a fortnight after V.G. Siddhartha, promoter of Coffee Day Enterprises, allegedly committed suicide in Mangaluru following severe financial strain. Coffee Day Enterprises is the operator of India's largest coffee retail chain Café Coffee Day.
Coffee Day said it entered a non-binding letter of intent with the US-based private equity firm. It also approved the sale of AlphaGrep Securities, a trading firm it owns for Rs 280 million.
The Global Village Tech Park of unit Tanglin Developments Ltd, a real estate subsidiary of Coffee Day Enterprises, houses several firms including IT companies Mindtree, Mphasis and others. It is spread across 100 acres. Siddhartha, in a letter purportedly written before his death, had valued the tech park at Rs 3,600 crore. The rental cash flow for the next 12 months is expected to be around Rs 250 crore.
The transaction will be completed once Blackstone finishes its due diligence which should be completed in the next 30-45 days, reported CNBC-TV18.
It is to be noted that Coffee Day and Blackstone were in talks for the tech park earlier this year for a deal value of Rs 2,700 crore, but the talks failed to materialise then. However, following Siddhartha's death, Coffee Day Enterprises had decided to actively look for opportunities to deleverage the group.
The talks with Blackstone reportedly revived over the last two weeks with Tanglin Developments. Coffee Day Enterprises's debt is estimated to be over Rs 65,000 crore.
