While there are still possibilities that Coca Cola may be interested in taking over Coffee Day Enterprises Limited (CDEL), there are now reports that TPG, a private equity firm is also in talks for possible acquisition of Coffee Day Global Limited (CDGL), the coffee chain. It is CDGL that owns all the 1750 retail outlets, 600 Value Express kiosks as well as the vending machines numbering around 60,000 located in different offices and establishments across the country.
Coffee Day has been looking to pare down debt, which is reportedly around Rs 1,100 crore for Coffee Day Global and Rs 4,950 crore on the books of Café Coffee Day Enterprises Limited. It is also being reported that the valuation of the company will be around Rs 4,000 crore, which is half of what its late founder VG Siddhartha was looking for when he was in talks with Coca Cola.
Reports also suggest that the vending machines may not be part of this deal. The talks may go through more rounds before the two sides come to some form of agreement.
CDEL owns 89.6% in Coffee Day Global. There are other companies within the group all owned by CDEL and these include Tanglin Development Ltd, Coffee Day Hotel and Resorts Pvt Ltd, Sical Logistics and Magnasoft Consulting. Of these, around Rs 3,000 crore is likely to be raised through liquidation of Global Village Tech Park which is owned by Tanglin Development Ltd. An agreement with Blackstone to handle this transaction has already been entered into. These funds may be used to clear some of the debts in the group companies.