Café Coffee Day may not be on the block for sale after all. According to a Mint report, the current idea is to explore if an investor could be brought in and the funds brought in by the investor used to pare debts in the coffee business instead of selling off of the business.
Some sources indicate this decision by the promoters could be the result of the talks with prospective buyers like Coca Cola not producing any agreeable result. It is possible the talks got derailed due to differences in the valuation of the business. But there is pressure from the lenders to the coffee chain and the promoters will have to find a quick solution to release at least a part of the ₹6,547 crores in debts that is owed by Coffee Day Enterprises.
Monetisation of some of the other assets in their possession could be another solution they are separately exploring. One transaction has already taken place with the selling off of Global Village Tech Park which fetched around Rs 3,000 crore.
However, in a regulatory filing, Coffee Day has denied media reports on the same.
For the record, the Coffee Day Group comprises Coffee Day Global (coffee business), Sical Logistics Ltd (integrated logistics), Tanglin Developments Ltd (real estate), Way2Wealth (financial services) and Coffee Day Hotels and Resorts Ltd (hospitality). Global Village Tech Park referred to above was a unit of Tanglin Developments, the real estate venture. The promoters must be hoping that they can sell some of these ventures and raise funds.
The main coffee business consists of the Café Coffee Day retail outlets chain, 54,000 vending machines located at different locations across the country and 500 stores which sell fresh coffee beans and ground powder. The coffee business is an ongoing venture earning profit and registering growth irrespective of the mounting debts the promoter was struggling with. In terms of numbers, Coffee Day Enterprises had posted a revenue of Rs 4,264 crore, for the financial year ended March 31 this year, 13% more than it did the previous year and profit stood at Rs 128 crore, 21% up from the previous fiscal.